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Emini Disappointing Follow-through

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Trading Update: Monday June 3, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed an outside down bar last Friday. However, it closed as a doji bar.
  • The bulls formed a bull breakout bar on June 5th. They hope the breakout is strong enough for a second leg up. So far, the bulls are disappointed by the lack of follow-through.
  • The problem the bulls have is that the June 5th bull breakout is a possible buy vacuum test of the May 23rd high. This reduces the probability that the bulls will get a successful breakout.
  • The bears want the daily chart to form a higher high major trend reversal. The bears did a good job getting the selloff down to the April low.
  • However, the rally up to the May high formed a tight bull channel. This increases the odds that the bears would need a trendline break of the May rally, which happened during the May 31st selloff.
  • The odds favor sideways for the next several months. The market will probably test down the April 29th breakout point high sometime soon.
  • The bears want a selloff during the final months of the year. Bears need to form strong bear bars that close on their lows if they convince traders that a downside breakout on the daily chart is likely.

Emini 5-minute chart and what to expect today

  • The Globex market has gone sideways for most of the overnight session.
  • Traders should expect a trading range to open and the market sideways. This means that most traders should consider not trading for the first 6-12 bars unless they can make quick decisions.
  • Most traders should try to catch the opening song that often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
  • There is an 80% chance of a trading range open, and only a 20% chance of a trend from the open up or down. This means that the odds favor sideways on the open.
  • The most important thing for traders to remember is to be patient.
  •  By waiting for 6-12 bars on the open, a trader will gain further clarity on the day structure and have a better chance at catching the low or high of the day.

Friday’s Emini setups

SP500 Emini 5-Min Chart Bear Trap Then Outside Up Day

Al created the SP500 Emini charts.

Here are reasonable stop entry setups from Friday. 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

EURUSD Daily: Surprise Bear Breakout
  • The EURUSD formed a downside breakout last Friday, closing below the moving average.
  • The bears are hopeful that the breakout is the start of a strong selloff and test of the April low.
  • The bears need follow-through selling if they are going to convince traders that a 2nd leg down is likely.
  • The bulls will sell today’s reversal up as a double bottom with the May 9th low and the 2nd leg being a wedge bottom.
  • The Bulls need a strong reversal if they are going to convince traders that they are in control. Without it, the odds will favor lower prices.
  • The market formed an open gap below Friday’s close. The odds are that this gap will be tested and closed over the next few days.
  • Overall, the odds favor sideways trading as the market decides on a reversal up or downside breakout.
  • At the moment, the bears have not done enough to force the bulls to exit longs. This means that a test of Friday’s close is most likely. Traders will pay attention to see what kind of reversal bar the bulls can create. If the Bulls can create a strong reversal bar, that will increase the odds of trapped bears and a reversal up.

Summary of today’s S&P Emini price action

SP500 Emini 5-Minute Chart Small PB Bull Trend From Open

Al created the SP500 Emini charts.

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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