S&P 500 E-Mini Bulls Hope for a Strong Buy Signal Bar
2023.08.10 10:11
- The bulls are hopeful that the Emini is forming a wedge bull flag following the tight bull channel.
- Next, the bulls want a strong buy signal bar today, and they are hopeful that tomorrow will lead to a strong entry bar for the bulls.
- While the Bears did a good job with the selloff down to August 9th, there are problems with it. The channel down is forming a wedge (July 27th, August 4th and 9th). This will increase the odds of a two-legged rally and a possible test of the August 4th high.
- The bears did enough to increase the odds of a second leg down and transition into a trading range. However, they failed to make the market Always In Short. This means a rally from the August 9th selloff can be very deep and possibly go to a new high.
- Today is Thursday, so the weekly chart is becoming more important. The open of the week is 4,518.25 and the bulls are hopeful that they can close above open creating bad follow-through following last week’s rally.
- This means that today may form a bull inside bar with yesterday’s outside bar on the daily chart; this would cause the day to close near the open of the week going into Friday.
Emini 5-minute chart and what to expect today
- The overnight Globex Market rallied back to around the midpoint of the weekly chart.
- There are several reports at 8:30 AM EST that have the potential to move the market.
- On the open traders should be ready for anything but expect a trading range open. This means that most traders should consider not trading for the first 6-12 bars. This is because the odds favor a limit order market and a trading range open.
- if the market forms consecutive strong trend bars on the open, traders will look to enter in the direction of the breakout.
- The most important thing on the open is to be patient. It is easy to become excited to trade on the open and force trades. There are 81 bars to the day, so there is plenty of time to place trades.
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.
