S&P 500 E-Mini Bears Want Measured Move Down
2023.08.17 09:53
Emini daily chart
- The Bears formed a downside breakout over the past two days. They hope this is a bear breakout below a bull flag that will lead to a measured move down of the bull flag.
- The measured move from the July 27th high to the Aug 11th low projects down to 4,278.
- While the market probably will not race down to the measured move projection, traders must respect the bears.
- The bulls are hopeful they will be able to disappoint the bears and create a bad follow-through bar today.
- The bear breakout over the past two days is strong enough that the first reversal up will probably fail, and the bears will get at least a small second leg down.
- Overall, traders should expect a small 2nd leg down after the recent two-bar bear breakout. The Bulls will likely need at least a micro double bottom before getting a possible reversal up.
Emini 5-minute chart and what to expect today
- Emini is up 11 points in the overnight Globex session.
- The Globex market has been in a tight bull channel for most of the overnight session.
- The bulls are hopeful that today will be a bull bar creating bad follow-through for the bears.
- Traders should pay attention to the open of the day as it will likely be a magnet. If the market is below the open but not far below, traders will look to buy for a test above the open of the day.
- Traders should be prepared for the bears to get another possibly bear trend day on the daily chart. If the open starts to form bear trending behavior, such as strong consecutive bear trend bars, traders cannot be in denial of the price action and must find a way to get short.
- Overall, traders should expect a trading range day until proven otherwise.
Yesterday’s Emini setups
SP500 Emini 5-Minute-Chart
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.
