Emini daily chart- S&P 500 Futures might form inside day today after selling off yesterday as bulls began to take partial profits at the bear trendline. Some aggressive bears will sell up here for scalps. However, the downside is likely going to be limited.
- The market will probably go sideways for a couple of days at this price level.
- It is important to notice that the market may begin to stall just under February 2023 high. If it does stall for several bars under the February high, that will be a sign of trading range price action.
- Strong trends break out beyond resistance before pulling back. However, it is common in trading ranges for the market to get vacuumed to a resistance level but not break out above it and pull back.
- The bears want the market to close the breakout point above the March 22nd high, and the bull wants this measuring gap to stay open.
- Right now, the bulls have the argument of a bull breakout of a bear flag. The bulls see the March 13th low to the March 22nd high as a bear flag. They see the recent breakout above the March 22nd high as a bull breakout of the bear flag, and they want the market to go up for a measured move and test around 4,300.
- The bears want the market to develop more selling pressure at this price level and reverse down, forming a lower high on February 2nd.
- Overall, the bears have not done enough to take control, and the best the bears can hope for is sideways. However, if the bears can develop more selling pressure, they will have a credible chance at getting below the March 22nd breakout point high. Until the bears can develop more selling pressure, traders should expect sideways to up as likely.
Emini 5-minute chart and what to expect today
- Emini is down 10 points in the overnight Globex session.
- The Globex has been in a trading range for most of the overnight session.
- Traders should expect today to have a lot of trading range price action.
- Since yesterday was an outside down day, the market may try and form an inside day today.
- Most traders should wait for 6-12 bars before placing a trade unless they are comfortable with limit orders.
- In general, traders should try and catch the opening swing trade that will typically begin before the end of the second hour after the formation of a double top/bottom.
- Important support and resistance levels today will be yesterday’s low, yesterday’s close, and probably the day’s open.
- While the odds favor a trading range open, traders must not be in denial of a trend from the open. If the day is going to be a bull trend, there will be plenty of time to enter the trend’s direction.
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.