As regular readers know, the Russell 2000 (RTY) futures market just loves to consolidate.
Even with all of the volatility hitting the markets lately, the RTY daily time frame has traded inside of its sideways channel for several months now.
But on the hourly time frame, we have identified an up channel and a known level of U-turn that could eventually cause the market to break out of its daily range.
The market is on its way towards that U-turn level as I write this, so let’s check out the charts and get prepared for a potential entry.
Anticipating the Entry
Here’s how the hourly chart is shaping up, with price heading down towards the known level of U-turn…
The RTY one hour time frame is in an up channel. The market is near the top of the channel.
It will be a good idea to wait for the market to form a low price at a known level of U-turn near the bottom of the channel or above the top of the channel before looking for long ideas.
Entry: Counter trend line break bullish near the bottom of the channel or above the top of the channel.
STOP: In the sell zone below the entry.
LIMIT: If entry is near the bottom of the channel, the limit will be just below the top of the channel. If the entry is above the channel, the limit is 1,905.00.
Once or if the market provides the one hour entry, it will be a good idea to turn to the five minute time frame and to look for Tunnel Trader long / Destination Trader long or Chandelier Trader long ideas towards the one hour price target.
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The Bottom Line
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