S&P 500 E-Mini: Sideways Movement at Resistance Likely

Emini daily chart

• The S&P 500 Futures gapped down and sold off below last Friday’s low. The market is continuing to go sideways at resistance.
• Because the market has been in a tight bull channel, there were buyers below last Friday’s low.
• The market is at resistance, the September 1^st high, and will probably test the moving average soon.
• The market can reach the moving average by either selling off to it or going sideways and dragging the moving average up to the current price level.
• Even if the market sells to the moving average, there will probably be bulls buying below and scaling in lower.
  
  

Emini 5-minute chart and what to expect today

• Emini is down 11 points in the overnight Globex session.
• The Globex market is testing the bottom of the trading range, which has lasted for several days.
• The bears want a downside breakout of the trading range that has lasted for the past several days, and the bulls want the market to stabilize and find buyers not far below.
• Today will probably have a lot of trading range price action on the open. Traders should consider waiting for 6 – 12 bars before placing a trade unless they are comfortable using wide stops and limit orders.
• Most traders should wait for the opening swing that often begins before the end of the second hour.
• Most traders should look for the opening swing that often begins before the end of the second hour, after typically forming a double top/bottom or a wedge top/bottom.
• It is important to try and catch the opening swing as it often provides excellent risk/reward.
• It is important on the open to be patient and not in a rush to trade. Remember, a trader is never overdue. One must not force trades when the market is not providing a strong trader’s equation for a trade.

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.

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.