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Emini Bears Want Test of April Low

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Trading Update: Thursday May 2, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Daily chart formed a second consecutive bear bar, closing below Tuesday’s strong bear breakout on the daily chart. While this is good for the bears, yesterday’s breakout overlaps most of Tuesday’s breakout bar. This weakens the bear bars.
  • Yesterday’s close is in the middle of the trading range, which lowers the probability of bears selling yesterday’s close.
  • The bears are hopeful this is the start of a second leg down, following April’s test of 5,000. Any selloff we get will likely disappoint the bears and lead to more sideways trading.
  • The bears will try for another bear bar closing below Wednesday’s low. This would increase the odds of lower prices, especially if today closes far below yesterday’s low.
  • The bulls want a bull reversal bar or a weak bear close, indicating that the bears are resistant to selling in the bottom third of the tight trading range.

Emini 5-minute chart and what to expect today

  • The Globex market rallied for most of the overnight session following yesterday’s late reversal of the FOMC rally.
  • The bears are hopeful that the U.S. Session will get trend resumption down and a breakout below yesterday’s low.
  • As always, traders should expect that today, there will be a lot of trading range price action on the open. Most traders should consider waiting for 6-12 bars before placing a trade unless they can be quick to make decisions.
  • Trades can also wait for a clear breakout with follow-through and enter the market once it becomes buy the close or sell the close.
  • If the market does get a trend from the open there is an 80% chance of a minor reversal on the open, and a 50% chance or a major reversal of the initial move.
  • Most traders can also consider waiting for the opening swing to begin before placing a trade. It is common for the market to form a double bottom/top or a wedge bottom/top to form before the opening swing begins.
  • There is an 80% chance of a trading range open, and only 20% of a trend from the open up or down.

Emini Intra-Day Update

  • The Emini Sold off from a bear trend form the open.
  • Bar 1 and 2 were strong enough for a second leg down and a possible test of yesterday’s low.
  • The bears are hopeful that the downside breakout (bar 8) below yesterday’s is strong enough for a second leg down. Next, they want the market to break far below yesterday’s low.
  • Bar 9 is a disappointing bar after the Bar 8 bear breakout. This increases the odds of sideways at yesterday’s low and will likely limit the downside for the next several bars.
  • The selloff to bar 9 is strong enough that today will likely be a bear trend or a trading range day. This means a bull trend is unlikely.
  • The market formed an inside bar on bar night that led to a 5-bar bull micro channel up to bar 12.
  • The reversal up to 13 is strong; however, it is more likely to lead to a trading range and not the start of a bull trend. This means that the pullback from the bar 13 rally could be deep and test back down to bar 9 high, which would be a 50% pullback of the rally (9 low to bar 13 high).
  • There is probably support back at the bar 9 high as bears will look to buy back shorts, and bulls will buy, betting on 2nd leg up. The market does not have to stop at bar 9 high and can test bar 8 close.
  • Bar 48 is a bull breakout of the triangle (bar 42) and a second leg up from the rally up to bar 21. It is testing the Open of the day, which is a magnate.
  • The bulls are hopeful that today will form a bull trend day. However, because of the selloff on the open, the odds are against a strong bull trend day. This meant that any rally above 1 will probably be limited unless the bulls get a strong breakout with follow-through above bar 1.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Trading Range Then Failed Bull Breakout after FOMC

Al created the SP500 Emini charts.

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 formed an inside bar today within a tight trading range.
  • The daily chart is in breakout mode, deciding which direction will lead to the successful breakout.
  • A tight trading range with yesterday being an inside bar is a triangle, which is a contracting triangle.
  • In general, the probability of a breakout up or down is close to 50% for both the bulls and the bears. There is also a 50% chance that the initial breakout will be in the wrong direction.
  • The bears are hopeful that the tight trading range will be a bear flag that will cause a downside breakout.
  • The bulls want the opposite. They want the selloff down to the April low to become a second-leg trap and for the market to test up to the April high, which is the top of the second leg.
  • Because the daily chart is in an overall trading range, the odds slightly favor the bulls. The bulls also have several consecutive bull bars over the past 12 trading days.
  • The bulls have a reasonable stop entry buy with today’s bull inside the bar. Next, they need a strong follow-through with tomorrow, which would trap the bears into a losing trade.
  • More likely, tomorrow’s follow-through will be disappointing and not be a strong entry bar for the bulls. In general, tight trading ranges are low-probability environments for stop entries. If the probability was high for a breakout in either direction, the market would not be going sideways.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Parabolic Wedge Bottom

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.

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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