Emini daily chart- The S&P 500 Futures are balanced and forming a triangle on the daily chart. This is a breakout mode pattern.
- The Emini formed another bull close in the middle of the two-week-long trading range.
- It is essential to realize that the market would be in the middle of a tight trading range if one side had a high probability.
- Traders should assume that the probability of a successful bull breakout compared to a bear breakout is close to 50%
- The bulls are holding above the 20-period exponential moving average, slightly increasing the probability of higher prices. The moving average reflects fair prices, and if the market is holding above what is deemed fair, that means there is a bullish bias.
- The bears need to show more signs of strength. It would be ideal if the bears could get a close below the moving average. Next, traders would want to see consecutive closes below the moving average at a minimum.
- Overall, traders should view the current price action as a breakout mode pattern where the probability is close to 50% for both the bulls and the bears.
Emini 5-minute chart and what to expect today
- Emini is up 8 points in the overnight Globex session.
- The overnight Globex session sold off during the early morning hours. However, it ended up being a pullback that led to higher prices.
- Traders should be neutral going into the U.S. Session.
- As always, traders should expect a trading range open for the first 6-12 bars to have a lot of trading range price action. Traders should consider not trading the first 6-12 bars unless they are comfortable with limit order scalping and can make quick decisions.
- Most traders should try and catch the opening swing that will typically begin before the end of the second hour. It is typical for the opening swing to begin after the formation of a double top/bottom or a wedge top/bottom.
- Traders should pay close attention to the open of the day as it will likely be an essential magnet.
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 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.