Emini daily chart
- S&P 500 Futures High 2 buy signal bar formed, closing on its high yesterday. However, the problem the bulls have with yesterday’s High 2 signal bar is forcing traders to buy at the top of a four-bar tight trading range. This will lower the probability of the bulls.
- The market will probably trigger the buy on the daily chart and attempt to break out above Monday’s (June 5th) high.
- The bears know the market will probably go above Monday’s high. They do not mind this happening as long as the market does not go far above Monday’s high and reverses down.
- The market is Always In Long, and the probability favors higher prices. However, the four overlapping bars this week lower the likelihood for the bulls.
- The bulls see last week as a breakout above the February 2nd high. They want this to lead to a double bottom (December 2022 low, March 13th Low), with a neckline at the February 2nd high. Next, they want the double bottom to lead to a measured move projection of 4,650.
- The bulls have the August 2022 high 100 points above the current price. Some bulls bought the August high and scaled in lower. They will likely look to exit around their original entry, back at the August high.
- Overall, while the Bears have done a good job, they need to do more.
- The week’s open is at 4,292, which is not far from the current price. Since today is Friday, it is reasonable to assume that 4,292 will be a magnet today going into the week’s close.
Emini 5-minute chart and what to expect today
- Emini is up 6 points in the overnight Globex session.
- The Globex market formed a second leg after an early morning selloff testing near the middle of yesterday’s day session range.
- The bulls want a bull trend today: follow-through buying after yesterday’s second entry buy on the daily chart. The bears want the opposite and for today to be a failed breakout of yesterday’s High 2 buy signal bar.
- Traders should expect a lot of trading range price action today. This means most traders should consider waiting for 6-12 bars before placing a trade unless they are comfortable with limit order trading.
- Most traders should try and catch the opening swing trade, usually before the end of the second hour.
- Today is Friday, so weekly support and resistance are essential. The market is near the week’s open, so traders should be mindful that the market may oscillate around it today. Traders should also be prepared for a potential surprise breakout up or down as traders decide on the close of the weekly chart.
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.