Inspecting the S&P Emini Market Trends
- As the market surges past the notable 5,400 mark, signs of a potential reversal are starting to emerge as the rally loses steam. This could signal the beginning of a trading range rather than a sustained bullish trend.
- Bears are keeping a keen eye on the market, hoping for a downturn following the ascent to 5,400. Their ideal scenario involves a retracement to the low recorded on May 31st, the latest higher low point.
- Contrarily, Bulls are intent on preventing the market from dipping below the May 31st high point. They argue in favor of a bullish trend as long as higher lows persist on the daily chart.
- In the upcoming weeks, it is anticipated that the daily chart will start to retract. The bears are looking to intensify selling pressure to persuade traders that the rally from the May 31st low was just an exhaustive buy climax.
- Traders will closely monitor the market in the following days to gauge the selling pressure the bears can generate to influence market direction.
Projections for Today’s Market Behavior
- During the overnight Globex session, Emini experienced a 24-point drop.
- The market observed a downward trend in the overnight session until it found stability around the key 5,400 level.
- Traders should prepare for a volatile market open with an 80% likelihood of a trading range, offering only a 20% chance of an immediate trend either upwards or downwards.
- This suggests the formation of a double top/bottom or a wedge pattern at the market open.
- Considering the high failure rate of breakouts at the open, traders are advised to refrain from trading during the initial 6-12 bars unless quick decision-making is feasible.
- Traders are advised to focus on capturing the opening swing, typically manifesting before the conclusion of the second hour.
- Given that it’s Friday, the weekly chart holds substantial significance. Bulls aim for a weekly close above 5,400, preferably surpassing the week’s midpoint at 5394.25. Conversely, bears wish for the opposite scenario.
- A surprising breakout towards the end of the day is plausible as traders finalize decisions regarding the weekly chart close.
- Attention should be directed towards the 5,400 level, likely to remain a pivot point throughout the day.
Reviewing Previous Day’s Emini Scenarios
Outlined are viable stop-entry setups from the previous day. Buy entry bars are denoted with green arrows, while sell entry bars are marked with red arrows. Subscribers to the Brooks Trading Course and Encyclopedia of Chart Patterns can access a detailed repository of swing trade setups, aiding in decision-making (refer to Online Course/BTC Daily Setups). Encyclopedia subscribers receive real-time daily chart updates alongside the Encyclopedia.
The primary focus is to present an ‘Always In’ perspective through these charts. For a trader aiming to maintain a nearly constant market presence or considering a position throughout the day, these entry points serve as logical entry junctures. They cater to swing trading opportunities.
It’s crucial to acknowledge that not all swing setups translate into actual trades. Many traders exit after experiencing disappointment, preferring to secure a small profit (scalp) or incur a slight loss.
If the risk associated with these setups outweighs your account capabilities, it’s advisable to await lower-risk trades or consider alternative market options such as the Micro Emini.