Emini Bears Want Strong Entry Bar

Trading Update: Tuesday May 21, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emin found sellers above last Friday’s high 1 buy setup. The bears have a second entry sell below yesterday’s low.
• They are hopeful that today will become a strong entry bar below yesterday’s low.
• The daily chart has been in a tight channel. However, it is getting far from the moving average, and at important resistance, the previous March all-time high.
• High 1 buy signal bars are always retest of prior highs. This means that they are typically a variation of a double top. When a High 1 buy signal bar forms late in a rally, there is an increased risk that traders will use the High 1 to sell out of longs and into shots at the previous extreme.
• The bears will see yesterday as a second entry short and a second failed breakout of the March high. They are hopeful that today will lead to a strong downside breakout, closing far below yesterday’s low, leading to a test of the moving average.
• The odds favor any selloff to become a minor reversal, which means there will likely be buyers below scaling in lower.
• The bears will need to develop more selling pressure before traders are convinced that they will have a credible shot at taking control.

Emini 5-minute chart and what to expect today

• Emini is down 7 points in the overnight Globex session.
• The Globex market went sideways for most of the overnight session.
• The bear recently formed a downside breakout around 8:30 AM EST.
• The bears are hopeful this will be the start of a strong bear trend day, which would create a strong entry bar on the daily chart.
• More likely today, there will be a lot of trading range price action, leading to disappointment for the bears.
• Traders should pay attention to yesterday’s low as it will likely be an important magnet.

Yesterday’s Emini setups

Al created the SP500 Emini charts.

Here are reasonable stop entry setups from yesterday. I show each buy entry bar with a green arrow and each sell entry bar with a red arrow. 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 formed a weak entry bar for the bears following Monday’s bear reversal bar.
• Today increases that any reversal down will be minor, leading to buyers below scaling in lower.
• The Bears need to do more if they will get a successful reversal of last week’s rally.
• While the market is Always In Long, the bulls could not break far above the April 9^th high. This increases the risk that the rally up to the May 16^th high was a buy vacuum test of support (April 9^th).
• The Bulls are hopeful that the rally above the May 3^rd breakout point high is a successful bull breakout of a bear flag that will lead to a measured move up.
• The market has a negative gap (April 25^th high and May 9^th low). This increases the risk of the breakout above the May 3^rd high staying open and the market becoming a small pullback bull trend.
• At the moment, the odds are against this; however, if the bulls begin to keep gaps open, the probability of a bull trend will increase.
• Overall, the odds favor a second leg up after the May 16^th high. The Bears need to create more selling pressure to get a successful reversal down and test of the May 9^th low.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

End of day video review

End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.

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

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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.

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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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