E-Mini Weak High 1 Buy Setup

S&P Emini pre-open market analysis

Emini daily chart

• The S&P 500 Futures triggered the sell below last Friday’s low and reversed up. Bulls have a high 1 buy signal bar today. However, it closed as a doji, a weak High 1 buy signal bar.
• The Bulls will likely get a second leg up and a test of the February high. However, yesterday’s signal bar increases the probability that the bears will get a small second leg down after last Friday’s bear bar.
• At the moment, the market is Always In Long. This means that traders will buy for a second leg up. The problem the bulls have is that the market is at the top of a trading range. This increases the risk of a possible trap for the bulls.
• The bears must create more selling pressure to convince everyone that last week’s two-bar bull breakout will fail.
• However, if bears manage to get the market to go sideways for a couple of bars and form a 2nd entry short, that would lower the probability for the bulls.
• Overall, the bears are trapped who sold during the bull breakout last Wednesday and Thursday (May 18th). The Bulls have an opportunity to get a strong 2nd leg up and need to take advantage of it.

Emini 5-minute chart and what to expect today

• Emini is down 16 points in the overnight Globex session.
• The overnight Globex market reached yesterday’s U.S. Session high and sold off, testing and breaking below yesterday’s low.
• The bears want today to close on its low. However, today will likely be a trading range day and disappoint the bulls and the bears.
• The bulls will try and get a bull trend bar closing on its high. If the market closes below yesterday’s high, this will create a High 1 buy signal bar.
• As I often say, traders should expect a lot of trading range price action today and for the market to go sideways for the first 6-12 bars. This means there is no rush to trade on the open because the odds favor sideways trading.
• Most traders should try and catch the opening swing that often begins after the formation of a double top/bottom or a wedge top/bottom. The opening swing will typically begin before the end of the second hour.
• Overall, traders should expect a trading range day. Lastly, traders should pay close attention to the day’s open as it will probably be a magnet for most of the day.

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.