S&P 500 E-Mini Bulls Need More Signs of Strength
2023.08.29 09:53
Emini daily chart
- The gapped up and closed above last Friday’s second entry buy signal bar.
- While the bulls did a good job creating a bull entry bar yesterday, the bulls need more signs of strength in order to make the market Always In Long.
- The bears are hopeful that the rally from the August 25th rally will lead to a second entry short.
- The bulls see a double bottom with the August 18th and 25th low. Next, the bulls want an upside breakout above the neckline (August 28th), and a measure move up.
- Even if the bulls get an upside breakout, the odds are that the daily chart is in a trading range. This means that the upside is probably limited and will likely lead to sideways trading.
- Overall, traders will pay close attention to see what kind of follow-through the bulls get today.
Emini 5-minute chart and what to expect today
- The overnight Globex market has gone sideways for most of the overnight session.
- Traders should expect the U.S. open to have a lot of trading ranger price action.
- This means that most traders should consider not trading for the first 6-12 bars unless they can trade with limit orders and make quick decisions.
- Most opens go sideways for the first 6-12 bars. This means the risk of missing a large move on the open is small.
- The most important thing on the open is to be prepared for anything and never deny the price action. If the market forms 2-3 consecutive strong trend bars on the open, the trader must find a way to enter at least a small position at the market.
- Overall, traders should pay close attention to the day’s open and yesterday’s high. The bulls hope they can get a close above yesterday’s high and increase the odds of higher prices on the daily chart. The bears want the opposite and are hopeful they can disappoint the bulls on the daily chart.
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.
