S&P 500 E-Mini: Bull Trend From Open Followed by Trading Range
S&P Emini Pre-Open Market Analysis
- The S&P Emini rallied above last Friday, forming a High 1 buy on the daily chart.
- The Bulls hope the High 1 buy setup will lead to a second leg up following last week’s upside breakout.
- The problem the bulls have is most High 1 buy setups in trading ranges lead to sellers above and a deeper pullback, which is what the odds favor today.
- The bears are hopeful they can reverse the recent upside breakout. However, the best the bears can do is create a trading range.
- Overall, the odds favor a pullback and second leg up.
What to Expect Today
- Emini is down 26 points in the overnight Globex session.
- The Emini broke out to the downside during the early morning hours.
- There is an 80% chance of a trading range opening and only 20% of a trading range open.
- Traders should consider waiting for 6-12 bars before placing a trade unless they are quick to make decisions since most reversals fail.
- Most traders should wait for the open swing to develop, which often begins after the formation of a double top/bottom or a wedge top/bottom.
- Traders should be open to a possible early low of the day due to bears who sold yesterday’s high 1 buy setup taking profits. However, if today is going to form an opening reversal, there will be plenty of time to react.
Yesterday’s Emini Setups
S&P 500 Emini-5-Min Chart
Here are reasonable stop-entry setups from yesterday. I show each buy entry with a green arrow and each sell entry 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 the 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.
