Emini daily chart- o Today is a FOMC day and the final day of the month. This increases the risk of a surprise breakout later in the day for S&P 500 Futures.
- o As I have mentioned, the risk is getting big for the bulls, which means those bulls must find a way to reduce their risk. The easy way to do this is to reduce their position.
- o This increases the odds of a pullback and a test closer to the moving average.
- o The bears hope to take control and form a strong downside breakout. However, the odds are against this. Any selloff they get will likely lead to a minor reversal and sideways trading.
Emini 5-minute chart and what to expect today
- o Emini is down 27 points in the overnight Globex session.
- o The Globex market has gone sideways for several hours and is likely trying to form a bottom.
- o The open of the U.S. Session will likely have a lot of trading range price action for the first 1-2 hours.
- o Today is an FOMC day, meaning traders should be prepared for many trading range price action leading up to the report at 2:00 PM EST.
- o Traders should be flat at least 30 minutes going into the report and wait for at least 10 minutes after the report before placing a trade.
Yesterday’s Emini setups
Here are reasonable stop entry setups from yesterday. I show each buy entry bar with a green arrow and each sell entry bar with a red arrow. 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.