S&P Emini Pre-Open Market Analysis
- The S&P 500 Futures found buyers at the 4,300-round number, and the 200–Day Moving Average.
- The Emini is approaching the end of the month and third quarter. The bulls will try to create as much of a tail as possible on the monthly chart to disappoint the bears. Traders should be prepared for a rally lasting a couple of days.
- The bears have done a good job on the daily chart. However, they are likely exhausted and will take partial profits, expecting a bounce.
- The market will probably test the August 18th low over the next week or two. It was reasonable for bulls to buy the August 18th low and scale in lower. Those bulls got trapped during the selloff and will probably look to sell out of longs near their first entry back at the August 18th low.
- The bears want to prevent the August 18th breakout point low from getting reached, which would keep the gap open.
- The bull sees two large legs on the daily chart, August 28th and Yesterday’s Low. They hope the market will form a 2nd leg trap and rally far above the August 18th low.
- Overall, traders should expect the bears to become disappointed and for the market to rally over the next few weeks.
What to Expect Today
- The overnight Globex market has gone sideways on the 60-minute chart for several hours.
- Yesterday’s low will act as resistance today, and the market may not fall below it today.
- The bulls will try their best today to get a bull bar closing above yesterday’s high.
- There is a 20% chance of a bear trend from the open and an 80% chance of a trading range open. This means that most traders should wait 6-12 bars before placing a trade.
- Traders can also consider waiting for a double top/bottom or a wedge top/bottom to form and try to catch the opening swing that often begins before the end of the second hour.
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 the 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.