Good morning, Traders!
We’re looking at the S&P 500 E-mini futures market (ES). Both the long-term and short-term directions are up, but we’re quickly approaching our monthly high price of 4460.25. Once we hit that price point, we’ll back off ES and wait for a new low price due to a coming sell-off before jumping back in. We can expect a possible 10%-11% price drop. But until that happens, we’ll keep looking for opportunities to buy the ES!
Don’t forget that we monitor trading patterns to make sure we jump into a market at the right moment. We don’t want to get stuck buying at too high of a price or while a market is on a downward swing. To learn more about how we use market trading patterns to our advantage, check out this free resource I created.
As the ES approaches the monthly up Fibonacci, we’ll take a step back and continue to monitor the market’s progress. Just because we’ve hit a point where we stay out doesn’t mean we’re done trading altogether! We’re just making sure we manage our risk appropriately.
Let’s looks at the timeframe analysis for the ES to see the market movement in more detail:Daily Timeframe Analysis
As you can see in the daily timeframe chart, the ES is still in an overall bullish trend, but the market is getting closer to the monthly up Fibonacci (monthly high price limit). That means we can expect the price to begin to drop in a pretty significant sell-off.DAILY TIMEFRAME
The long-term direction is up for the ES
The short-term direction of the market is up for the ES
We’re watching the ES at it gets closer to the monthly high price limit
The ES is quickly approaching the monthly high price, meaning we should prepare for a sell-off
Until that happens, we can still buy the ES. We’ll just want to make sure we watch our timeframe charts as the price approaches the 4460.25. Remember that the market trades in waves, so we shouldn’t worry when these things happen. My strategy accounts for it, and that’s why you should follow along as I show you how to ride the waves of the futures market!
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Monthly Timeframe Analysis
For today’s analysis, I’m taking a bit of a different approach. This is the monthly timeframe that I use to look at long-term direction for a given market (you can still see in the Daily Direction Indicators above that the one-hour timeframe direction is still up).
With the ES quickly approaching the monthly up Fibonacci extension, I wanted to show you how the market will likely react once we hit that price point.
The monthly timeframe shows how the sell-off could play out once the ES hits the monthly high price of 4460.25
All indicators point to a 10%-11% sell-off once the ES lands on 4460.25. Buyers will likely retreat, and sellers take over the market, forcing a price dip. Read more about long-term vs. short-term trading here to better understand how this all plays out across the different timeframes.The Bottom Line
While both the daily and one-hour timeframe show that the ES is still a buy, we’re quickly approaching the monthly high price limit. Once we hit that point, the market is likely to trade sideways a bit before pulling back in a bearish sell-off.
But that doesn’t mean we run away from the ES in fear! This is an opportunity to take advantage of a new low price that we can buy and then sell at a new high price once the market returns bullish.
We’re still in the ES, but we’ll need to keep a close eye on the overall price as it approaches the monthly high price
That’s why it’s time for you to stop making excuses and start working on becoming a winning futures trader! Follow along as I reveal the crucial aspects of my trading strategy that will allow you to become a profitable futures trader!
Keep On Trading,
Mindset Advantage: Execute
In the end, trading is about execution. A detached, matter-of-fact execution that takes into account market data. It’s those darn emotions that get in the way.
What if you were able to execute every trade like you were cleaning up after a great meal with friends or family?
Instead of each entry or exit being the heart-pounding, drama filled moment that it is (for many) – remove your emotions and treat it as though it just needs to be done.
Like taking out the trash, you don’t think about it. You don’t shed any tears over the 5 day old ravioli or hamburger buns that you’re throwing away. Why waste another second on that trade?
Good or bad. Simply execute. And free yourself to see the market from a different point of view.Traders Training Session