E-Mini Bulls Want Rally to 4,400

S&P Emini pre-open market analysis

Emini daily chart

• The S&P 500 Futures closed above the February high last Friday. This is a strong enough upside breakout that it will probably get a second leg up and a test of 4,400.
• The Emini bulls want rally to test the August high, which is around 100 points higher.
• The bears want the upside breakout last Friday to fail and for the market to reverse today or tomorrow. While this is possible, the Bulls will probably get a small 2nd leg up. This means the first reversal down will probably fail.
• Traders will pay close attention to the kind of follow-through the bulls will get today.
• The bears will try and get back follow-through today and damage the bull argument that last week was the start of a successful upside breakout.
• Overall, traders should assume that the bulls will become disappointed in the next couple of days and for the market to make traders question if last week’s breakout will succeed or fail.

Emini 5-minute chart and what to expect today

• Emini is up 3 points in the overnight Globex session.
• The Globex market has gone sideways in a tight trading range for most of the overnight session.
• Traders should expect the open to have a lot of trading range price action and for the market to go sideways.
• Traders should consider not trading the first 6-12 bars unless they are comfortable with limit order trading and making fast decisions.
• Traders should also assume that there is a 50% chance that the initial breakout on the open will fail and reverse directions.
• By waiting for 6-12 bars, a trader gains certainty on the day and increases their odds of possibly catching the high or low of the day. There is a 50% chance that bar 6 is either the high or the low of the day.
• Traders should focus on catching the opening swing that often forms before the end of the second hour.
• It is common for the opening swing to form after forming a double top, double bottom, or wedge top/bottom. This often provides a reasonable stop-entry trade for traders trying to catch the opening swing.
• The opening swing can provide a very good risk reward and decent probability, so traders should focus on trying to catch it.
• Lastly, traders should be ready for anything today. The bulls want follow-through buying today, and the bears want to halt the follow-through.

Friday’s Emini setups

Here are several reasonable stop-entry setups from Friday. 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.