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Emini Strong Bear Breakout on Daily

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Trading Update: Friday April 5, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed a strong downside breakout yesterday and closed below the daily moving average.
  • Yesterday’s downside breakout is a big enough surprise that the odds favor a second leg down.
  • Traders will pay close attention to what kind of follow-through selling the bears will get.
  • While the Bears have done a great job getting below the moving average, it is the first close below the moving average since January. This reduces the odds of the market getting a strong downside breakout on the daily chart.
  • Because yesterday’s breakout was a surprise, bulls will likely be cautious about buying the first reversal up. This increases the odds that the first reversal up will be brief, and the bears will get an attempt at a second leg down.
  • Overall, yesterday, the odds increased that the daily chart is transitioning from a tight bull channel into a trading range.

Emini 5-minute chart and what to expect today

  • Emini is up 15 points in the overnight Globex session.
  • The Emini has been in a tight bull channel for most of the overnight Globex hours.
  • Traders should expect today to have a lot of trading range price action on the open.
  • Yesterday was climactic, which means there is a 75% chance of a trading range lasting for two hours beginning before the end of the second hour.
  • Today is Friday, which means weekly support and resistance is important. The weekly chart is a bear bar near its low. The bulls will want today to rally, which would create a tail below the bar and the bears want the opposite.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Trading Range Open Then Midday MTR Selloff

Richard created the SP500 Emini charts (Al travelling).

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 reached a high on March 26th and pulled back to near the April 2nd buy signal bar high.
  • The odds are that the April 3rd rally is strong enough for a second leg up. This means that the market will probably go beyond the April 4th high over the next couple of days, even if there is a deep pullback first.
  • While the odds favor a second leg up, traders must remember that the market is in a trading range. This means that the bulls are likely going to be disappointed by any rally that they get.
  • A logical target for the bulls is the March 21st high.
  • Today is forming a high 1 buy signal bar. The bears are hopeful that there will be sellers above today’s high 1. However, because the rally on April 3rd was strong, the odds are the best the bears can get is sideways and that the bulls will get a second leg above the April 4th high.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Pullback from Yesterday Selloff Then Trading Range

Richard created the SP500 Emini charts (Al travelling).

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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