Emini daily chart
- The S&P 500 Futures has had two consecutive days, with the range being less than 20 points. Bulls want follow-through buying.
- The daily chart is in the middle of a trading range that has gone on for over a month. This means that the market is in breakout mode and deciding on the direction of the breakout.
- Traders should assume that the probability is close to 50% for both the bulls and the bears.
- At the moment, the odds slightly favor the bulls, but not by much. If the bulls had a big advantage, the market would not go sideways.
- Since last Friday had a strong reversal up, that increases the odds that the bulls will get a second leg up to the May 1st low.
- The bulls will probably get at least a small second leg up because of the strength of the May 5th bull breakout.
- The bears had a 4-bar bear micro channel down to May 4th. The bears that sold the May 4th high are trapped and likely sold more higher. Trading ranges are forgiving if a trader uses wide stops and scales in higher. Like the bears that sold the April 26th high and scaled in higher, the market eventually allowed those bears out.
- Overall, the market is in breakout mode, and it is important to realize that the probability is close to 50% for both the bulls and the bears. If one side had a high probability, the market would not go sideways. Traders who want high probability should wait and see a clear breakout with follow-through; otherwise, sideways is more likely.
Emini 5-minute chart and what to expect today
- Emini is up 27 points in the overnight Globex session.
- The Globex Market had an upside breakout recently during the 5:30 AM PT report.
- Today will probably gap up, and the Bulls will try tget a second leg up after last Friday’s bull breakout.
- As I often say, traders should expect the open tgsideways for the first 6-12 bars. However, they should be open ta possible bull trend from the open.
- Since the odds are the market will gap up, traders should expect the bulls tget at least a second leg up. If the market sells off on the open, traders should expect the bulls tget at least an attempt up following the gap up.
- If the buying pressure is not strong on the open, traders should expect sideways tdand for the market ttry and test the moving average.
Yesterday’s Emini setups
Here are several reasonable stop-entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a near 4-year library of more detailed explanations of swing trade setups (see Online Course/BTC Daily Setups). Encyclopedia members get current daily charts added to Encyclopedia.
My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter. These, therefore, are swing entries.
It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.
If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.