E-Mini Likely to Test June 30 Gap

S&P Emini pre-open market analysis

Emini daily chart

• The S&P 500 Futures will likely test into the June 30th gap on the daily chart and pullback for a day or two.
• The Emini formed an inside bar with the June 30th Bull breakout bar.
• The bulls hope that the rally will continue; however, the market will likely have to pull back for a couple of days.
• The bears want to retest the June 29th breakout point high at a minimum. This is an area where the bears gave up on the idea of the rally up to June 29th being a bear flag. This means the high of June 29th is a magnet and will likely act as support if the market reaches it.
• The bears hope the market is forming a double top with June 16th. Next, they want a breakout below the neckline (June 26th and a measured move down.
• More likely, the market will continue sideways for the next couple of weeks.
• The bulls will probably get a second leg up since the bears will likely buy the first reversal down. These bears are trapped in a losing trade and will likely buy back shorts for a smaller loss. The Bulls know this and will probably look to buy as well.
• Overall, the Bulls will probably get a second leg up. Since the odds favor a second leg, traders must be prepared for the opposite and, instead, an endless pullback that leads to a double top and measured move down.

Emini 5-minute chart and what to expect today

• Emini is down 35 points in the overnight Globex session.
• The Overnight Globex market sold off below yesterday’s low, which has gone sideways for several hours.
• The bears want today to close on its low and damage the bull case on the daily chart.
  The Bulls want the opposite and will try to get a rally on the open.
• Traders should expect a lot of trading range price action on the open. As I often say, most traders should consider not trading for the first 6-12 bars as the market will probably be in a limit order market.
• Most traders should focus on catching the opening swing trade that often begins by the end of the second hour. It is common for the market to form a double top/bottom or a wedge top/bottom before the opening swing trade begins.
• Lastly, traders should be ready for anything on the open and trade the chart in front of them. While the odds favor a trading range open, a trader cannot be in denial if the market starts to form trending behavior.

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.