S&P Emini pre-open market analysis
- The S&P 500 Emini Bulls formed a second leg up last Friday following Thursday’s bear bar. The Bears are hopeful that today will form an inside bar closing on its low. This would create a second entry short.
- The Bulls formed a climactic exhaustive breakout late in a bull trend last Wednesday. The odds favored profit-taking and bad follow-through, so last Thursday (July 11th) was a bear bar.
- It is common for exhaustion bars to get a brief second leg up, as last Friday did. Sometimes, that second leg can be one bar.
- Last Friday had a tail above the bar and the day close below the midpoint. This increases the odds of sellers above and the bulls getting disappointed on any rally.
- The bears want today to reverse below yesterday’s low and form a bear inside the bar. This would create an implied second leg down.
- The rally-up that began in July is climactic and late in a bull trend. This increases the odds of a reversal down and test of the 5,500 and July low.
- If the bears will get the reversal down, they must add to the selling pressure and continue making the market go sideways.
- So far, the bears have done a good job with the past two days. However, they need to do more.
- Overall, the market will probably continue going sideways and returning to the moving average.
What to Expect Today
- Emini is up 20 points in the overnight Globex session.
- The Globex market has drifted sideways to up in a tight bull channel (15-minute chart) since Sunday’s open.
- The bulls are hopeful they will be able to undo last Friday’s strong selloff into the close. However, they are likely to be disappointed on the open.
- The past 8 bars on the 15-minute chart have had a lot of overlap. This increases the odds of sideways trading on the open.
Friday’s Emini Setups
Here are reasonable stop-entry setups from Friday. I show each buy entry bar with a green arrow and each sell entry bar with a red arrow. 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.