E-Mini Bulls Want Strong Upside Breakout Today
2023.04.18 10:48
S&P Emini pre-open market analysis
Emini daily chart
- The had a strong rally into the close yesterday. This created a bull inside bar closing on its high.
- The bulls want yesterday’s inside bar and want strong upside breakout and measured move up based on the past eight days. This would get the market above the February 2nd high, a target for the bulls.
- The bears see yesterday as an inside bar and possible final flag. They want any upside breakout to fail and lead to a reversal back down.
- The channel up from the March 13 low is tight. This increases the odds that any reversal down will lead to sideways trading.
- At the moment, the odds are the market will get up to the February 2nd high. If the bulls can start to get 2-3 consecutive bull closes, the probability will increase for the bulls.
- The bulls still have the potential for a measured move up from the bull breakout of the bear flag (March 13th low to the March 22nd high). This measured move projection is around 4,300.
- The bears will try to prevent the market from surpassing the February 2nd high. At the very least, the bears want any breakout above the February high to fail, leading to a reversal down.
- The first target for the bears is a test of the March 22nd high, followed by a test of 4,000. If the bears are going to get a downside breakout, they need to develop more selling pressure.
- Overall, traders will pay close attention to the price action over the next few days. The bulls can get an upside breakout above yesterday’s high. The bears will try and overpower the bulls and prevent an upside breakout.
Emini 5-minute chart and what to expect today
- Emini is up 16 points in the overnight Globex session.
- The Globex market formed a strong 2nd leg up during the overnight session following the strong rally into yesterday’s U.S. Session Close.
- Yesterday’s U.S. Session rally late in the day was climactic. This means there is a 75% chance of two hours of trading range trading, beginning before the end of the second hour.
- There is a 50% chance of follow-through buying on the open. However, if there is, the 75% chance of trading range trading mentioned above still applies.
- There is a 25% chance of the day forming another strong bull trend day without getting two hours of sideways trading first.
- As always, traders should expect limit order trading on the open. Most traders should be patient and wait for the first 6-12 bars. Even waiting for 6 bars will give traders much information on what type of day is forming.
- Most traders should try and catch the opening swing trade that usually begins before the end of the 2nd hour. The open swing often begins after the formation of a double bottom/top or a wedge bottom/top.
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.
