Emini Strong Bear Breakout

S&P Emini pre-open market analysis

Emini daily chart

• o    The Emini gapped down and formed a strong bear breakout bar, testing near the moving average and the January 12^th breakout point high.
• o    The bears are hopeful that today will lead to another strong bear trend day and get a close below the moving average.
• o    More likely, today will have disappointing follow-through selling and lead to a trading range day or a bull bar, closing above the open of the day.
• o    Yesterday is enough of a surprise to expect at least a small 2nd leg down, but the pullback might be deeper than what the bears want.
• o    The market is still Always In Long, and the odds favor a minor reversal down.
  
  

Emini 5-minute chart and what to expect today

• o    Emini is up 14 points in the overnight Globex session.
• o    The overnight Globex market rallied during the early morning hours.
• o    Today has only a 25% chance of becoming a strong bear trend day.
• o    There is a 75% chance of a trading range lasting two hours, beginning before the end of the second hour.
• o    There is a 50% chance of selling on the open, followed by 2 hours of sideways trading.
• o    As always, traders should expect a trading range open and consider not trading for the first 6-12 bars unless they can make quick decisions and trade with limit orders.
  
  

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.