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Emini Bears Want 2nd Leg Down

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Trading Update: Monday April 10, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini went outside up on Thursday, triggering the High 1 buy setup of last Wednesday’s high.  The two-day selloff on April 4th is probably strong enough to get at least a small 2nd leg down.  This means more sellers might be above last Thursday’s high than buyers.
  • When the market forms a High 1 buy setup, more bears will often sell the high for a scalp unless the market is in a strong breakout. This is why most pullbacks often have two legs and form a high 2 buy setup.
  • The market is beginning to stall at the bear trendline (blue line) and just under the February 2nd high.
  • While the market will probably test the February 2nd high soon, the market is in a Trading Range. This means that the pullback might be much deeper than what traders want.
  • One obvious target is a test of the March 22nd breakout point high. Bears likely got trapped selling the March 22nd high, and they will probably look to sell out of longs back at the high, regardless of whether or not they scaled in higher. The Bulls know this, and they will also be interested in buying around the March 22nd high.
  • The bears need to continue to develop more selling pressure and make the market go sideways. Every bar that goes sideways will make the probability closer to nature and increase the odds of a reversal. Without the increase in selling pressure, the odds of more sideways to up will be higher.
  • Overall, traders will pay attention to the next couple of days and see if the bears get a small 2nd leg down following the high 1 buy triggered by last Thursday’s outside up bar.

Emini 5-minute chart and what to expect today

  • Emini is down 25 points in the overnight Globex session.
  • The overnight Globex market went sideways for most of the overnight session. The bears recently got a downside breakout on the 60-minute chart, testing near the April 6th low.
  • Today will probably gap down. This means traders should expect at least a small 2nd leg down on the open.
  • As always, traders should expect the first 6-12 bars to have a lot of trading range price action.
  • Most traders should try and catch the open swing trade that typically begins before the end of the 2nd hour.
  • It is common for an opening swing to develop after forming a double top/bottom or a wedge top/bottom.
  • Lastly, since the Globex market is so close to the April 6th low, traders should pay close attention to it this morning. The market may test it and find support at this price level (4,096.5).

Emini intraday market update

  • The Emini gapped down and rallied to the moving average for the first 2 hours of the day.
  • Although the bull rally had many strong bull bars, the bears closed gaps above new highs and made money with limited orders.
  • This increased the probability of the rally being a bull leg in what would become a trading range.
  • The bears got a strong selloff down to around 9:00 AM PT. The odds favored a 2nd leg down. However, the bears got trapped during the upside breakout and gave up.
  • The rally up to 9:40 AM PT was a low-probability event. This means the odds favor a 2nd leg up. However, the day has had a lot of trading range price action, increasing the risk of a deep pullback. If the market starts to go sideways, traders should be prepared for a possible pullback below bar 38 (9:40 AM PT) low.
  • As of 9: 50 AM PT, the bears do not have enough selling pressure, and the odds favor a 2nd leg up.

Thursday’s Emini setups (previous trading day)

SP500 Emini 5-Min Bear Trap Small Pullback Bull Trend From The Open
Above is the version that I post every day. Because I often get questions about what charts Encyclopedia members see, today I am including the example below of that version.
Encyclopedia Sample Bear Trap Small Pullback Bull Trend from the Open

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from last Thursday (before Good Friday market holiday). 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.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

  • The EURUSD is trying to get a downside breakout after testing the February 2nd Close last week. The February 2nd Close may not have been adequately tested. The market came within 26 pips of the close, which may not be enough of a test.
  • The current selloff may be a trap, and the market will probably have to test up closer to the February 2nd Close.
  • The bears will try and get a strong downside breakout with follow-through. However, at a minimum, the bears will need a strong breakout below the moving average (blue line).
  • Overall, while the bears are trying to form a credible lower-high major trend reversal, traders should wait for the bears to get a strong downside breakout. Otherwise, the market may have to reverse up and test closer to the February 2nd Close.

Summary of today’s S&P Emini futures price action

SP500 Emini 5-Min Wedge Failed Then DB HL MTR and Small Pullback Bull Trend

Al created the SP500 Emini charts.

End of day video review

Live stream videos to follow Monday, Wednesday and Thursday(subject to change).

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

Trading Room

Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room days. We offer a 2 day free trial.

Charts use Pacific Time

When times are mentioned, it is USA Pacific Time. The Emini day session charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.

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