S&P 500 E-Mini Likely to Reach August 18 Low
2023.09.26 10:26
- The are reversing up and attempting to test the August 18th low.
- The Bulls hope this will lead to a successful 2nd leg trap. More likely, the best the bulls will be able to achieve is a trading range.
- The Bulls need to develop more buying pressure to convince traders they are taking control. Until then, the odds favor sellers above and a trading range or a bear flag.
- Over the next few days, traders will pay close attention to the August 18th breakout point low. The bulls want to break above the August 18th low to relieve the trapped bulls.
- The bears want the opposite, and for the market to fail to reach the August 18th low and force the bulls to buy back their shorts.
What to Expect Today
- The Globex market is in a tight trading range and has gone sideways for most of the overnight session.
- The market is in breakout mode on the Globex 60-minute chart and is deciding on a breakout up or down.
- Yesterday’s high will likely be a magnet, and the day’s open during the U.S. Session.
- As always, traders should assume an 80% chance of a trading range open and only a 20% chance of a trend from the open.
- This means that most traders should consider not trading for the first 6 – 12 bars unless they are comfortable scalping with limit orders.
- Most traders should try and catch the opening swing that often begins before the end of the second hour. It is common for the opening swing to start after forming a double top/bottom or a wedge top/bottom. This means most traders can wait for one of the above patterns and have a reasonable stop-entry trade with good risk/reward.
Yesterday’s Emini Setups
S&P 500 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 the 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.
