E-mini In Middle Of September/October Trading Range

E-mini in a trading range since Sept. 20 low. There is a lower low double bottom (Sept. 20/Oct. 4) and a lower high double top (Sept. 23/Oct. 7). In middle of September/October trading range.

Breakout Mode, which means 50% chance of successful bull breakout and 50% chance of successful bear breakout.

Because of weekly and monthly chart buy climaxes, there is currently a 50% chance that the E-mini began a 15% correction with the Sept. 2 high.

3-day selloff to middle of trading range.

Bulls see the selloff as a double bottom pullback (a pullback from the reversal up from the double bottom), but they need a reversal up this week.

Bears see the selloff as a reversal down from the double top, but they need more bear bars.

Oct. 7 high did not quite reach 50-day MA. In a trading range, legs usually reach important support and resistance. Many traders do not believe the 50-day MA was adequately tested. E-mini might have to reach it before the bears will consider selling aggressively.

3 days down in a trading range is becoming excessive. This increases the chance of a reversal up today or tomorrow, and it reduces the chance of another strong bear day today.

If instead the E-mini continues to sell off, especially with big bear days closing on their lows, the odds of a successful breakout below the double bottom will go up.

At the moment, the market is neutral while traders decide on the direction of the next big move.

h2 E-mini 5-minute chart and what to expect today/h2

E-mini is up 3 points in the overnight Globex session.

Yesterday’s early trading range was an area of agreement. Since it was late in a bear trend, it will probably be the Final Bear Flag. Today might get stuck there for several hours.

That trading range is also just below the magnet of the 60-minute EMA.

While it is possible for today to be a fourth big bear day, that is unlikely since the market is in a month-long trading range. Four consecutive days strongly in one direction would be unusual.

Therefore, today will probably be sideways to up, or only slightly down. Traders will be more willing to buy reversals up from selloffs.

h2 Yesterday’s E-mini setups/h2

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).

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My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter. These therefore are swing entries.

It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.

If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro E-mini.

Written By: Al Brooks