E-Mini: Buyers Below Second Entry Short
2023.06.08 10:26
S&P Emini pre-open market analysis
Emini daily chart
- Yesterday formed a second entry short; probably buyers below and near the high of February 2nd.
- The Bulls had a High 1 buy on the daily chart, following last week’s strong bull breakout. However, the bulls failed to get strong follow-through, and the bears managed to get a failed breakout above the High 1 and close on the bar on its low.
- The bears want to undo the damage caused by last week’s bull breakout by getting a strong bear bar today.
- More likely, the bears will get a disappointing entry bar for the second entry short below yesterday’s low.
- The bulls will buy, trying to create a second entry buy today following Tuesday’s high 1 buy signal bar.
- There are trapped bulls who bought above Tuesday’s High 1 buy signal bar and are trapped with yesterday’s bad entry bar. These bulls more than likely are willing to scale in lower.
- If the bulls do get a decent second entry buy signal today, traders will pay close attention to the retest of Tuesday’s High 1 buy signal.
- If the bulls are very disappointed, they will sell back at the entry price of Tuesday’s High 1.
- The Bears have done an excellent job getting a second-entry sell. However, the bar has been overlapping the past three days, which lowers the probability of today getting a strong entry bar.
- The bears need to do more, and ultimately, they need to get a close below the February 2nd breakout point.
Emini 5-minute chart and what to expect today
- Emini is down 3 points in the overnight Globex session.
- The overnight Globex session got a late downside breakout last night (15-minute chart). However, it was a bear breakout below a triangle.
- The market formed a final flag, and the market reversed back up during the early morning hours.
- The bears want to get a bear trend today, which would create a strong entry bar following yesterday’s 2nd entry short. The bulls want a strong bull trend today, which would make a 2nd entry buy on the daily chart.
- More likely, the market will have a lot of trading range price action today.
- As I often say, traders should expect 6-12 sideways bars on the open. Most opens go sideways for the first hour. This means that there is typically no rush to avoid missing a move.
- If a trader waits for 6-12 bars, they gain more certainty on the day’s structure. Also, it is common to see at least one opening reversal during the first 6 bars, so a trader avoids getting trapped by waiting.
- If today is going to be a trend day, there will be plenty of time to enter the trend’s direction.
- Most traders should try and catch the opening swing trade that often begins before the end of the second hour. It is typical for the opening swing to begin after the formation of a double top/bottom or a wedge top/bottom.
- Lastly, traders should pay close attention to the day’s open and yesterday’s low, as both will probably be magnets.
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.
