Emini daily chart
- S&P 500 Futures breakout mode on daily chart continuing to go sideways, forming a triangle. This breakout mode pattern means that the probability of a breakout up or down is close to 50%.
- Traders should expect more trading range price action and disappointment until a clear breakout with follow-through closing far beyond support or resistance.
- Eventually, there will be a breakout of the range. However, the sideways trading can last much longer than what seems reasonable.
- The range over the past four trading days is contracting, which increases the odds of a breakout soon. The breakout could happen quickly, so traders must be prepared when the market starts to form strong trend bars up or down.
- Until there is a clear breakout, there is no breakout, which means traders should be patient.
- The bulls still want a breakout above the February 2nd high. Next, they want a test of 4,300, which is a measured move target of the bull breakout of the March 13th low to the March 22nd low.
Emini 5-minute chart and what to expect today
- Emini is up 10 points in the overnight Globex session.
- The Globex market has gone sideways for most of the overnight session.
- Traders should assume that the open will have a lot of trading range trading.
- This means traders should be prepared to trade with limit orders or consider stepping aside for the first 6-12 bars.
- Since the daily chart is forming a triangle and in breakout mode, traders must be prepared for a possible strong trend from the open up or down and a breakout of the past four trading days.
- Most traders should wait for a clear breakout with follow-through on the open or for the opening swing trade to develop.
- There is a greater than an 80% chance that the open will have a swing trade that typically develops after the formation of a double top/bottom or a wedge top/bottom. There is a 40% chance that the opening swing will double the range of the day, which means it typically provides great risk/reward.
- Today is Friday, which means weekly support and resistance are important. The week’s open is 4,154.5 (ES.D/RTH not Globex/ETH) and will likely be a magnet most of the day. Lastly, traders should be prepared for a possible strong breakout late in the day 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.