S&P Emini Pre-Open Market Analysis
- The S&P 500 Emini formed a doji bar last Friday after failing to break below Last Thursday’s weak bear bar.
- The bulls will likely be interested in looking to buy closer to support, such as the 5,500 round number.
- While the bears have managed to disappoint the bulls after the June 17th bull breakout, the channel up is tight. This will increase the probability that the market will have to go sideways for several bars before the bears can get a reasonable chance of a second leg down.
- The bulls are hopeful that last Thursday’s outside down breakout is disappointing enough that there are buyers below it. Next, they want the market to go above the high of last week.
What to Expect Today
- Emini is down 5 points in the overnight Globex session.
- The Globex market has gone sideways for most of the overnight session.
- The bears are trying to get a downside breakout below Sunday’s Globex session low, and the bulls want to prevent it.
- At the moment, the market is unlikely to get a large gap on the open. This will increase the odds of trading range price action on the open.
- As I often say, most traders will be better off waiting for 6-12 bars before placing a trade unless they are able to make quick decisions.
- Most traders should wait for the opening swing to develop, which often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
Friday’s Emini Setups
Here are reasonable stop-entry setups from Friday. 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.