Emini pre-open market analysis
Emini daily chart
- The S&P 500 Futures rallied yesterday and formed an inside bar with last Friday’s Low. Emini bulls strong entry bar wanted following yesterday’s buy signal bar.
- The bulls want a bull breakout of a bull flag and a measured move up from the March low to the March 16th high, projecting up to around the 4,150 price level.
- The bears want any breakout above the March 16th high to fail, leading to a wedge top (March 14th and March 16th).
- March 16th is a surprise breakout, which will probably have a second leg up.
- The bulls that bought the rally up to March 6th expected a 2nd leg up, and they got trapped on the March 7th bear breakout. While most of these bulls likely took the loss on March 7th or March 8th, some bulls would use a wide stop and buy lower.
- This means that the March 6th low is a magnet for that trapped scale in bulls.
- The market is at the bottom of a trading range and trying to form a double bottom with the December 2022 low.
- Trading ranges often get bull breakouts of bear flags at the bottom of the trading range. This means traders should be prepared for a possible upside breakout and a rally back up to the March 6th low.
- For the bears to regain control, they will need to undo the damage caused by the bulls last week.
- Overall, traders should expect continued trading range price action; however, they should be open to a potential upside breakout over the next few days. Until there is a clear breakout above the March 6th high, there is no breakout. This means traders should expect a trading range until the breakout happens.
Emini 5-minute chart and what to expect today
- Emini is up 35 points in the overnight Globex session.
- The market has continued to rally during the overnight trading hours.
- Traders should expect a trading range open for the first 6-12 bars and consider not trading until after this time.
- Most traders should wait for a credible swing trade. A swing trade typically forms before the end of the second hour after the formation of a double top/bottom or a wedge top/bottom.
- Lastly, traders can wait for a clear breakout with follow-through and look to enter for a 2nd leg in the direction of the breakout.
- Traders should be open to the possibility of a bull trend day as the market tries to get a strong entry bar following yesterday’s buy signal bar. The bears want to opposite and a failed breakout.
- Traders should be open to a possible opening reversal down if the bulls manage to get a brief rally on the open. This would mean that there are sellers above yesterday’s buy signal on the daily chart.
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.