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Emini Bulls Want Second Entry

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Trading Update: Thursday October 19, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini sold off below the October 13th low. However, it failed to close below it. The bulls want today to reverse up, forming a second entry buy.
  • The market is Always In Long after the rally to the October 11th bull breakout. It is essential to realize that this is a bull breakout within a trading range, not a bull tend. This means that traders expect a deep pullback, which is happening on the daily chart right now.
  • Because the market is in a trading range, the current pullback could reach the October 5th breakout point high before the bulls get a reversal.
  • The odds favor the bulls getting a second leg up after the breakout that ended on October 11th. The longer the market goes sideways, the lower the probability for the bulls will be.
  • Traders will pay close attention to see if the bulls can create a second entry buy and undo the damage caused by yesterday’s bear breakout.
  •  The bears want to prevent a strong second entry buy from forming, which would increase the odds of a bear breakout of a bear flag and a test of the October low.

Emini 5-minute chart and what to expect today

  • Emini is 3 points down in the overnight Globex session.
  • There is an 80% chance that today will form a trading range open and only a 20% chance that today will form a trend from the open up or down. This means that traders should be cautious of any breakout on the open unless there is strong follow-through.
  • Most traders should consider waiting for 6 – 12 bars before looking to place a trade. This will help traders avoid getting trapped by failed breakouts on the open.
  • Traders should pay attention to yesterday’s low, as it will likely be an important magnet today. The bears want to close below it, and the bulls want today to close far above it.
  • Traders should be aware of a possible selloff on the open, followed by an opening reversal and a test back to the open of the day.

Emini intraday market update

  • Bar 1 is a doji, and the market will probably test back to it even if the bears get a couple of legs down first. The bears want the gap below bar 1 to stay open. However, it will probably close.
  • The bears want a trend from the open, and so far, they have 3 consecutive bear bars. The market is not yet Always In Short.
  • The first 6 bars of the day have a lot of overlapping bears. This is a breakout mode pattern, and waiting to see what the breakout looks like is better.
  • It is common for most opens to form a trading range before there is a clear breakout and swing trade.
  • The bears want a test down to the low of the day. If the market does sell off and test yesterday’s low. The bulls will try for a major trend reversal.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Broad Bear Channel Follow-through from Yesterday

Richard created the SP500 Emini charts (Al on leave).

Here are reasonable stop entry setups from yesterday. I show each buy entry with a green arrow and each sell entry 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

EURUSD Daily: Possible Inside Bar
  • The EURUSD is forming a tight trading range under the moving average.
  • Bulls will see the tight trading range as a final flag. They hope that any breakout below will fail and lead to a reversal.
  • The bears want a bear breakout and a measured move down of the recent tight trading range.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Trading Range Open Fed Chair Report Then Bear Trend Resumption

Richard created the SP500 Emini charts (Al on leave).

End of day video review

 

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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