Market Overview

Great Setup in the E-Mini S&P 400

Great Setup in the E-Mini S&P 400

The E-Mini S&P 400 has developed one of my favorite trading setups, which means this E-Mini could be ready for a significant breakout opportunity.

Inside Value Setup

The 15-minute chart of the E-Mini S&P 400 (EMDH3) shows an Inside Value relationship has developed, which usually leads to a solid breakout in the upcoming session.

The Inside Value setup occurs when the current day's Value Area (the dotted lines) develops inside the prior day's Value Area (blue horizontal lines). Essentially, this setup shows that price is coiling, and could be due for a breakout very soon, likely in the upcoming trading day.

Without a doubt, this setup contributes perhaps the majority of my biggest trades, which is why I featured it in my book, Secrets of a Pivot Boss.

Keep in mind, since FOMC news looms ahead, this pattern could continue to develop rather than breakout.

The Game Plan

If the EMD opens the session with a gap out of range and value, we could see a solid unidirectional trending move in the direction of the gap for the first few hours of the day.

However, it is very important that the right opening relationship occur. That is, while the setup is extremely promising, price must open with a gap out of the prior day's price range (or very close) in order for the full effect of the pattern to play out.

Therefore, we'd like to see price open below 1,088.50 or above 1,097.50, as an open of this magnitude would indicate that initiative participants are eager to seek new value. However, If price opens within range and value, this is an indication that price is not ready to see big movement, and instead may lead to further sideways development.

Since the 10-day ADR is 9.9, we'll keep our eyes on the following initial ADR targets: Bull targets of 1,104.3 and 1,106.8; Bear targets of 1,084.5 and 1,082. Adjust these targets once the overnight high and low are recorded.

If you want to read more about ADR Targets, check out this article Find the BEST Real-Time Targets.

Let's see how this one plays out!


Frank Ochoa
PivotBoss | Own the Market

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