ES Futures Update: A+ Breakout Setup on Weds. What's Next?
Good evening traders! As promised, Ill be checking in a bit more often now that Ive completed moving residences, and I’m settled into the new home. Hope you’re all having a nice weekend and are ready for some good trading action this coming week!
In last weeks newsletter on Tuesday, we discussed the strong possibility of a daily chart breakout on Wednesday, specifying 5313 being the buy signal.
Here’s the excerpt from last week:
Here’s the daily chart setup we discussed last week and on twitter:
This daily chart is high on the list as one of the best daily chart setups I’ve seen all year for a variety of reasons (This is outlined in detail in our daily recorded webinar for Livestream Trading members on Friday, along with some intraday trades we took during the week after the breakout).
Weds was moving day for me, so I wasn’t able to be at the screens after the open, but there was no way I was missing this trade rare high quality multi day setup.
The breakout signal came in pre-market and I was up early waiting for it. I gave it a slightly wider stop than normal since I couldn’t monitor in real time (about 10 points as its a bigger time frame signal), and was aiming for an initial move/target of 5350 with a chance for a multi-day runner).
I’m very pleased with the result of this breakout, but not at all surprised.
Again, it was a perfect A++ setup on all time frames, and after 2 weeks of chop and a nice bear trap pullback in late May, along with 2 attempts for bears to take control on Monday and Tuesday of last week that failed (see the daily chart wicks from last Mon and Tues but note the daily chart continued to close over the EMA), this trade was a no brainer.
Following the breakout, Thursday and Friday provided incredible intraday action with clean trends, and lots of range for intraday trading and scalping on the livestream, and I suspect early this week this great action will continue.
As always, after a big breakout, we typically need a couple days for the market to cool off and potentially gear up for the next move.
Thurs and Friday were great for that, as we got a pullback on Friday right to the daily EMA in premarket which it held and bounced off immediately showing the bulls are still in control on that time frame for now:
This provided some nice intraday trading opportunities, both long and short.
Trade Plans for This Week
After last weeks breakout, I think we may still need a day or two to re-test some levels and it should provide us with some good intraday trade opportunities.
I suspect we will see trades on both sides, such as the examples above, with decent intraday range and good trends for both sides on the smaller time frames.
Key levels Ill be watching for setups:
This pocket between 5328 - 5338. I like to watch for bounce long plays in these areas, however, I almost never blindly bid them, I look for specific setups and price action to validate those trades, but this is a zone Ill be watching closely if we re-test it:
The level at 5362 is a big spot as well. If the bulls can reclaim and hold over that level, I would likely start looking at intraday setups long. If they fail to hold it, Ill look at shorts (though I am still bullish in the big picture, I think we’re in a mode here for a day or two where we can intraday trade both sides, I would not consider a short for much more than an intraday move).
Here’s an example of what a decent long setup off that level might look like (green circle indicating where the buy signal would be with such a setup if it were exactly as drawn below, and the red line indicating stop loss / risk level):
If the bulls fail to show up tomorrow, for the overall health of the daily chart and setup for the next move, I would love to see a multi day bear flag to clear out some longs and to get some shorts involved who could help fuel the next potential move:
If something like this were to happen I would watch very carefully for a bounce play off the prior breakout area near 5315.
There are a ton of possibilities for this week, and Ill be going over them tomorrow morning on our daily live stream, and the plan for Mon/Tues is to trade the trend intraday until we’re ready for the next daily chart move.
Hope you all have a prosperous trading week. Looking forward to updating you again when we are setting up for the next move. In the meantime, stay nimble early on this week.
P.S. Our preferred broker for futures trading is Ironbeam. We have a special deal with them where you can trade MES contracts for as low at $0.25 / contract and ES as low at $0.69 / contract.
Don’t pay your broker more than you have to! Click here to register for an account with Ironbeam though us, and receive these discounts automatically!
You will also get access to one month of free data and platform if you want to paper trade with them and practice before you fund a live account. Ironbeam now has integration with Trading View, Sierra Chart, as well as their in house platform which is 100% free.
Have a great trading day tomorrow, team!