Emini daily chart
- The S&P 500 Futures sold off, testing last Friday’s low, and rallied above the open, creating a bull reversal bar. Bulls upside breakout wanted above April 18th high.
- At the moment, the odds slightly favor the upside breakout and test of the February 2nd high; however, if the probability truly favored the bulls, we would not be going sideways here.
- The market continues to find support near the moving average (blue line) and 4,150.
- There are two important targets above and below. They are the 4,000 big round number and 4,300, the measured move projection from the March 13th low to the March 22nd high.
- It is common for the market to go sideways in the middle of an important support and resistance level. Looking at the chart, 4,150 is right in between the two important magnets mentioned above, which increases the odds more sideways trading around 4,150.
- Since the market has been sideways for more than 12 bars, it is in breakout mode, which means the probability is close to 50% for a breakout up or down.
- Also, the market has been above the moving average for 18 bars, another sign of strength by the bulls.
- Overall, most traders should wait for a breakout up or down. If the bulls or bears start to get consecutive strong trend bars, the probability will increase for a successful breakout.
Emini 5-minute chart and what to expect today
- Emini is down 18 points in the overnight Globex session.
- The overnight Globex session sold off but failed to break below the April 24th low.
- The bulls see the early selloff below the April 24th low as a 2nd leg trap following yesterday’s late selloff after the U.S. Session closed.
- On the 60-minute chart, the Globex market is in a broad bear channel for several bars with lots of decent buying pressure. This increases the odds of an upside breakout soon and a test of the most recent lower high (April 24th high).
- Since the Globex market on the 60-minute chart is trying to form a wedge bottom, this will increase the odds of a possible rally on the open today.
- As I often say, traders should assume that the open will have a lot of trading range trading. Most traders should wait for 6-12 bars before placing a trader unless they are quick to make decisions and can trade with limited orders.
- There is more than an 80% chance of a swing trader on the open, beginning before the end of the second hour. The swing trade typically starts after the formation of a double top/bottom or a wedge top/bottom.
- The most essential thing on the open is to be patient. There are 81 bars on a 5-minute chart, and by waiting for 6 bars, a trader will gain more clarity on the likely structure of the day.
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.