Emini Bulls Disappointment Likely after Globex Upside Breakout

Trading Update: Wednesday April 12, 2023

S&P Emini pre-open market analysis

Emini daily chart

• Bulls got a strong upside breakout during the 5:30 AM PT report. Traders should expect the bulls disappointment likely by follow-through.
• The bears got a strong downside breakout late during yesterday’s session, forming a bear bar on the daily chart.
• The bears will see yesterday’s close as a second entry short on the daily chart. However, it will probably lead to a minor reversal and sideways. This means that there are likely buyers below, scaling in lower.
• The market is deciding if the rally up to April 4^th is strong enough to reach the February 2^nd high or if the market will have to pull back and test the March 22^nd high.
• Although yesterday’s bears signal bar looks weak, traders should assume there is around a 40% chance it will lead to a test of the March 22^nd breakout point high.
• If bears begin to get two to three consecutive bear bars closing on their lows, the probability will increase that the market will test the March 22^nd high.
• While the odds of any pullback will lead to a minor reversal and find buyers, the daily chart is in a trading range. This means traders should be mindful that the bears might get a surprise bear breakout and test of the March 24^th low. If the market starts to collect more bear bars, the probability will increase for the bears.
• Overall, the daily chart will probably go sideways to up and test closer to the February 2^nd high. Traders will pay attention to today’s close. If today is a strong bear bar, closing below its midpoint, that will increase the probability of a test of the March 22^nd breakout point high.

Emini 5-minute chart and what to expect today

• Emini is up 22 points in the overnight Globex session.
• The market got a 36-point upside breakout during today’s 5:30 AM PT report. This bar is big enough to lead to a second leg up.
• The U.S. session will gap up. This means that traders should expect a brief second leg up following the gap up on the open.
• Traders should expect the market to go sideways for the first 6 – 12 bars. This means there is no rush to trade the open, and most traders should wait.
• The bears will try and undo the damage caused by the bull breakout on the 5:30 AM PT report.
• Most traders should try and catch the opening swing trade that typically begins before the end of the second hour after forming a double top/bottom or a wedge top/bottom.
• The pullback following the 5:30 AM PT breakout is deep, increasing the odds of sellers at the 5:30 AM PT close (4,173.25).

Emini intraday market update

• The Emini gapped up following the CPI report during the Globex session.
• The market sold off during the first 4 bars of the day, closing below the high of yesterday.
• By bar 4, the market was Always In Short, and the odds favored a 2^nd leg down.
• The rally up to bar 12 was a deep pullback from the selloff during bars 3-4, which increased the odds of the market evolving into a trading range later in the day.
• At 8:15 AM PT, the market formed a possible low of the day. At the time of writing this, the market is testing the bar 4 low and beginning to go sideways.
• Traders should expect sideways trading for the rest of the day.
• As of 8:45 AM PT the market is probably Always In Long and the first reversal down will be minor. However, it is Always In Long following a tight bear channel down, which will probably limit the upside. This means that the currently really will probably begin to go sideways soon.

Yesterday’s Emini setups

Al created the SP500 Emini charts.

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.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

• The EURUSD reversed up from the April 10^th failed bear breakout and is now at the February 1^st close. I have been saying the market would probably reach the February 1^st close and allow the scale-in bulls to get out.
• It was reasonable to buy the February 1^st close if a trader was willing to use a wide stop and scale in lower.
• Traders will pay attention to what happens at the February 1^st close. If the market breaks far above it, that will be a sign that more traders were buying at the retest of the February 1^st close, increasing the probability of higher prices. If the market reverses down from the February 1^st close, it will increase the probability that the market is in a trading range.
• Most traders should wait for a clear upside breakout with follow-through above the February range before buying.
• The bears need a decent sell signal bar around the February 1^st close. This would be a sign of a failed breakout of the February high and increase the probability of a pullback to the middle of the two-month trading range.
• Overall, traders will pay close attention to today’s bar to see if it closes on its high or gets a deep pullback.                  

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

Al created the SP500 Emini charts.

End of day video review

• Emini End of Day review link for today. Click to watch on YouTube.

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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