S&P Emini pre-open market analysis
Emini daily chart
- The S&P 500 Futures is beginning to stall at the 4,600 big round number and will probably pull back for a day or two.
- The market reached 4,600 yesterday. However, the day was mostly a trading range day. This is a sign that the momentum is drying up, at least temporarily.
- The Emini will probably pull back for a few days and, at a minimum, go sideways.
- The bears are hopeful that they can damage the bull rally. They need a strong enough downside breakout that the odds will favor a second leg down.
- Overall, the upside is probably limited over the next several weeks, and the market will likely have to pullback before the bulls have a credible chance at getting higher prices.
Emini 5-minute chart and what to expect today
- The overnight Globex market has gone sideways for most of the overnight session.
- The market likely got neutral going into the Initial jobless claims report at 5:30 AM PT which will probably move the market.
- Traders should expect a trading range open during the U.S. Session. This means traders should consider waiting for the first 6-12 bars before placing a trade unless they are comfortable with limit order trading.
- Traders should pay attention to the open of the day since the market will probably be in a trading range.
- Traders should be mindful that the market might close below the day’s open due to the daily chart becoming climactic. If the market is above the open and the rally is not strong, traders should be prepared for a selloff back to the open.
- Overall, traders should be prepared for a trading range day. However, they must remember that price is truth. This means one can never be in denial of the chart and must trade the chart in front of them.
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.