Emini Probable Second Leg Up after Last Week’s Rally

Trading Update: Tuesday May 2, 2023

S&P Emini pre-open market analysis

Emini daily chart

• The Emini formed a doji bar, closing near the day’s open.
• The odds are that there are buyers not far below yesterday’s low and that the daily chart will get a probable second leg up following last week’s strong two-bar bull breakout.
• While the bears are hopeful that last Thursday and Friday’s bull breakout will be a bull trap at the top of a trading range, the market will likely test the February 2^nd high.
• If the bears can make the market go sideways or get strong bears close, the probability could shift quickly.
• Traders are willing to buy high in a trading range if they think the momentum up is strong enough to break out of the range. However, as soon as traders detect that the momentum is stalling, traders begin to sell, and the market can quickly fall below breakout points, such as the April 26^th high.
• April 26^th was a test of the March 22^nd high, and the bears failed to get a bear close below the March 22^nd high. This increases the odds that the bulls will get a measured move from the March 13^th low to the March 22^nd high, which projects up to 4,300.
• The bulls see the breakout above the March 22^nd high as a bull breakout of a bear flag. In trading ranges, it is common to get bull breakouts of bear flags (bear pullbacks) and bear breakouts of bull flags (bull pullbacks). This is because trading ranges have a higher probability of lower probability events happening.
• Overall, traders should expect at least a small 2^nd leg up following last week’s strong bull breakout. However, the market may have to stall for a few days first.

Emini 5-minute chart and what to expect today

• Emini is down 10 points in the overnight Globex session.
• The Globex market has been going sideways for most of the overnight session.
• Traders expect any selloff to be minor and the market to go sideways. If the market sells off on the open, traders will look to buy an opening reversal up as long as the selloff is not too strong.
• As I often say, traders should consider waiting for 6-12 bars as the market often goes sideways in the first hour.
• Most traders should wait for the opening swing to develop, which typically begins before the end of the second hour after forming a double top/bottom or a wedge top/bottom.
• Traders should also pay close attention to the open of the day as the day will probably have a lot of trading range price action.

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 has a 4-bar bear micro channel just above the 20-bar exponential moving average (blue line). This is a sign of increasing selling pressure. The bears still need to do more by getting a breakout and a bear close below the moving average at a minimum.
• The bulls have 26 bars above the moving average, a sign of a tight bull channel.
• The odds are that the channel up from the Mach 15 low will convert into a trading range and test prior higher lows.
• Overall, the market is in a tight trading range, and traders should expect more sideways to down trading.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

End of day video review

Live stream videos to follow Monday, Wednesday and Friday (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.

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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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