S&P Emini Pre-Open Market Analysis
- The S&P 500 E-Mini found sellers above last Friday’s high 1 buy setup. The bears have a second entry sell below yesterday’s low.
- They are hopeful that today will become a strong entry bar below yesterday’s low.
- The daily chart has been in a tight channel. However, it is getting far from the moving average, and at important resistance, the previous March all-time high.
- High 1 buy signal bars are always retest of prior highs. This means that they are typically a variation of a double top. When a High 1 buy signal bar forms late in a rally, there is an increased risk that traders will use the High 1 to sell out of longs and into shots at the previous extreme.
- The bears will see yesterday as a second entry short and a second failed breakout of the March high. They are hopeful that today will lead to a strong downside breakout, closing far below yesterday’s low, leading to a test of the moving average.
- The odds favor any selloff to become a minor reversal, which means there will likely be buyers below scaling in lower.
- The bears will need to develop more selling pressure before traders are convinced that they will have a credible shot at taking control.
What to Expect Today
- E-Mini is down 7 points in the overnight Globex session.
- The Globex market went sideways for most of the overnight session.
- The bear recently formed a downside breakout around 8:30 AM EST.
- The bears are hopeful this will be the start of a strong bear trend day, which would create a strong entry bar on the daily chart.
- More likely today, there will be a lot of trading range price action, leading to disappointment for the bears.
- Traders should pay attention to yesterday’s low as it will likely be an important magnet.
Yesterday’s E-Mini Setups
Here are reasonable stop-entry setups from yesterday. 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.