Emini Sideways Likely for Bears

Trading Update: Friday June 7, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini formed an upside breakout on June 5^th and found bad follow-through. This is a reminder that the market is likely in a trading range and will begin to go sideways.
• The Bears want a reversal back down to the 5,300-round number.
• While the bulls have done a good job getting a second leg up from the May 22^nd rally, it is likely a bull leg in what will become a trading range. This means there are likely sellers above the May 22^nd.
• The bears hope the market forms a higher major trend reversal. Next, the bears want a strong reversal down and a breakout below the April low.
• While higher high major trend reversals can lead to a strong selloff, the market will most likely have to form a lower high significant trend reversal.
• This means that even if the bears get a strong selloff, they will likely have to pull back and form a credible lower high.
• The first target for the bears is a test of the May 31^st higher low. The next target is a test of the April 29^th breakout point high.
• Overall, the market is likely transitioning into a trading range. The Bears need to develop more selling pressure to get a strong downside breakout. At the moment, the best the bears can hope for is more sideways trading.

Emini 5-minute chart and what to expect today

• Emini is down 15 points in the overnight Globex session.
• The Globex market formed a strong downside breakout during today’s 8:30 AM EST unemployment report.
  The bear breakout is strong enough for a second leg down.
• The bulls are hopeful that the recent bear breakout is a trap that will lead to a reversal up. At the moment, sideways is most likely for the bulls.
• The market is going to gap down. This means traders should expect at least a small 2^nd leg down on the open.
• As always, traders should be patient on the open and not rush a trade. Most traders should consider waiting for 6-12 bars before placing a trade unless they can make quick decisions.
• Most traders should try to catch the opening swing that often begins before the end of the second hour, after forming a double top/bottom or a wedge top/bottom.  
• Today is Friday, which means that weekly support and resistance are important. Traders should be prepared for a possible surprise breakout late in the day as traders decide on the close of the weekly chart.  
• The most important thing on the open is to not be in a rush. It is easy to force bad trades on the open and spend the rest of the day trying to make up the loss.
• By being patient, one will increase their probability of catching the high or low of the day.

Summary of today’s S&P Emini price action

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.

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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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