Emini Tight Trading Range, Breakout Mode

Trading Update: Tuesday June 11, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini formed a bull inside the bar, closing near its high. The Bulls are hopeful that yesterday is a variation of a 2^nd entry buy. However, it is within a tight trading range, which lowers the probability of buying above yesterday’s high.
• The Bulls are hopeful that last Wednesday’s bull breakout is strong enough for a second leg.
• The bears want to continue to build the selling pressure and increase the odds of a failed breakout above the May high.
• The bears have not done enough to convince traders they have won. This increases the odds that the rally to last Wednesday will probably get a second leg up over the next few days.
• The bears will try their best to get a bear reversal bar closing near its low today.

Emini 5-minute chart and what to expect today

• The Globex market has been in a tight bear channel for most of the early morning hours. This increases the odds that the market will go sideways on the open.
• Most traders should be patient on the open and wait for 6-12 bars before placing a trade. This is because most opens form a trading range and form either a double top/bottom or a wedge top/bottom.
• There is a 20% chance that the market will form a trend from the open. This means there is an 80% chance of a trading range forming.
• Traders should pay attention to the low of yesterday as it will likely be a reasonable magnet for the market to test. If it does fall below it, there are probably buyers below.

Yesterday’s Emini setups

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 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 2^nd leg down is likely.
• The bulls will sell today’s reversal up as a double bottom with the May 9^th low and the 2^nd 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

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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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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