E-Mini Bulls Want Measured Move Up

2023.08.30 11:27

S&P E-Mini pre-open market analysis

E-Mini daily chart

• The bulls got a strong breakout of the neckline (August 24th) of the double bottom (August 18th and 25th). The bulls hope to get a measured move up of the double bottom, which projects around the 4,585 price level.
• The  formed a strong rally over the past three days following the August 25th buy signal bar.
• As strong as yesterday’s breakout bar is, it is a climactic bar in a trading range. This increases the risk that today might get back follow-through and trap the bulls into a bad buy.
• While yesterday might be the start of a 2nd leg bull trap, more likely, it is a strong enough bull breakout for a second leg up.
• Traders that want a higher probability will wait to see what today’s follow-through bar looks like and look to buy as long as today is not a strong bear close.
• The bears see a big vacuum and the start of a second leg trap, with August 24th being the first leg. They are hopeful that today is a strong bear reversal bar, which would trap the bulls into a bad buy.
• Overall, the market is Always In Long and likely to go higher for a second leg up.

E-Mini 5-minute chart and what to expect today

• E-Mini is up 3 points in the overnight Globex session.
• The overnight Globex market has gone sideways for most of the overnight session.
• Yesterday’s strong rally was climactic, increasing the odds that today will be a trading range day and not another strong bull trend bar.
• There is a 75% chance that the market will have at least two hours of sideways trading beginning before the end of the second hour.
• There is also a 50% chance of follow-through buying on the open, followed by two hours of sideways trading beginning before the end of the second hour.
• There is a 25% chance of a strong trend day up or down.
• Traders should pay close attention to the following magnets today: the open of the day and yesterday’s high and close.
• Overall, traders should assume today will have a lot of trading range price action until the market shows evidence of trending behavior.

Yesterday’s E-Mini setups

SP500 Emini 5-Minute Chart

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Disclosure: 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 exits. 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 E-Mini.

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