S&P Emini Pre-Open Market AnalysisEmini Daily Chart
- The S&P Emini gapped down and closed the March 8th breakout point yesterday and reached the moving average.
- This is a sign that the daily chart is transitioning into a trading range
- The bulls see yesterday’s bull reversal bar as the second entry at the moving average. They hope today will lead to a strong bull entry bar, followed by a test of the March 21st high.
- The bears have done a great job reaching the moving average. Next, they need to get strong bear closes below the moving average to convince traders that they are taking control.
- Even if the bears can get 3-4 bars below the moving average, the odds will favor a trading range rather than a bear trend.
- Overall, the bears will probably be disappointed over the next couple of days as bears take profits and bulls begin to buy at the moving average. The bulls will continue to buy every test of the moving average until it no longer works.
What to Expect Today
- Emini is down 15 points in the overnight Globex session.
- The Emini has been in a trading range for most of the overnight Globex session.
- Then bears are hopeful the U.S. Session will get follow-through selling and test down to yesterday’s low.
- As always, traders should expect a trading range open. There is an 80% chance of a trading range open and only a 20% chance of a trend from the open up or down.
- Most traders should try to catch the opening swing, which often begins before the end of the second hour after a double top/bottom or a wedge top/bottom forms.
- Traders should be aware that the market is near the 20-period moving average on the daily chart. This increases the risk of the market finding support nearby and finding buyers near yesterday’s low.
Yesterday’s Emini 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.