Emini daily chart
o Today is the final day of the month. The bulls have a bull reversal bar, closing near their high. The bulls will want another bull trend day and paint as little of a tail above the current monthly chart bar as possible. The bears want the opposite. They want to create as much damage to the current bar on the monthly chart.
o The S&P 500 Futures gapped up yesterday and closed above the March 22nd high. Although yesterday was a bear close, this is a sign of bullish strength.
o The bulls want to create a measuring gap and trap the limit order bears selling, betting on a failed bull breakout.o The bears need to prevent the bulls from getting another bull bar today. If the bulls can get another strong close today, it will increase the chances of a measured move from the March 13th low to the March 22nd high, projecting up to around 4,300.
o There is a bear trendline around 4,140, and the market may have to test it.
Emini 5-minute chart and what to expect today
o Emini is up 13 points in the overnight Globex session.
o The Market has been in a tight bull channel on the Globex 60-minute chart since March 28th. Yesterday’s overnight session spent much time going sideways.
o Traders should expect a trading range open. This means that most traders should wait for the first 6-12 bars before placing a trade.
o Most traders should wait for the opening swing trade that usually forms before the end of the 2nd hour after forming a double top/bottom or a wedge top/bottom.
o The most important thing to remember on the open is to be patient and not too eager to trade. There are often several reversals, so traders should wait for a clear breakout with follow-through if they want to trade breakouts.
o Today is the end of the quarter, Month, and week. This will create the potential for a surprise move, up or down late in the day. Traders should be prepared for anything.
Yesterday’s Emini setups
Above is the version that I post every day. Because I often get questions about what charts Encyclopedia members see, today I am including the example below of that version.
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.
Understanding that most swing setups do not lead to swing trades is important. 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.