The e-mini stock index futures contracts are probably the most popular of the dozens of e-mini products. These contracts are appealing because of their affordability, leverage, liquidity, profit potential and round-the-clock trading.
So, in this week’s article, let’s take a look at the e-mini from the perspective of the Hawkeye Volume based trade methodology. First off, please notice the two yellow dotted lines I’ve placed on the chart.
The bottom dotted lines show you where the isolated lows and phantoms have occurred at the bottom of this price range that the E-Mini is in.
And at the top, you can see on that dotted line, I have placed three arrows down, which all indicate where phantom or isolated highs have occurred.
If we look at arrow number four on the bottom, you can see that on Thursday and Friday, we had two bars of no demand volume. In other words, there were no buyers or sellers in command of those bars.
However, Friday’s bar is an interesting bar, which will give the clue to what this week is going to be. You can see that we have 50% of an isolated high in place. Now, when I say 50% of an isolated high, which is a Hawkeye Pivot, it requires a new bar to complete. So, if on Monday, the bar has a lower high and a lower bottom than on Friday, there will be a yellow dot placed above that bar showing a Pivot.
And, that will be in harmony with the yellow dot (the Hawkeye Pivot low before), because it will be 5 bars up, Pivot, then down.
And as we say, we are always expecting 3-5-7 bar reactions of Pivot highs and lows.
But, let’s have a closer look at the bar on Friday. You can see that it opened above Thursday’s close. And that is where the amateurs jumped in and said this is going to go up. Then, the professionals came in and started to sell it. And, as there was no demand there was no through buying. Then, the price came back down from its open of the high and closed under the close of Thursday.
So, this coming week, we are going to see probably one of two things; either a test up at the 2122 level, which will be the fourth attempt to get through that resistance area.
And, if any of you are Gann followers, you will know that normally on the fourth attempt, resistance and support breaks.
So, we could see a break up and a new trend run up for the S&P as we go into the summer holidays. Or alternatively, if an isolated high is put in on Monday, so we have a lower high and a lower low than on Friday, you will see that we will come down and test the 2062 area.
And, if that breaks, we are going to be in a trend run down. So, a very interesting week setting itself up on the S&P.
Watch it closely, because if it does break up to the upside, we are probably going into a very strong uptrend, which is contrary to what most people think of what happens during the summer holidays.
And again, if it breaks that dotted line low, we will be meandering down into the critical months of September and October, which as we know through history, are cyclical down months of the market.
So, look at market structure, look at Hawkeye, look at the volumes, and I think there is going to be a very interesting trade setup this coming week.
Now, all of this (and much more) is demonstrated in our Wednesday room by my colleague Randy Lindsey.
So, I cannot encourage you enough to come along to the Wednesday room.
Please contact us at [email protected] for any questions you might have about using Hawkeye Indicators in your trading!
[The magenta and cyan arrows are included for illustration only and do not form part of the software]