Trading Update: Wednesday April 17, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed a follow-through bar yesterday. However, yesterday’s bar is small compared to last Friday’s bear breakout. This is a sign of the momentum getting weaker and increases the odds of a pullback.
- The market is probably Always In Short because it is far below the moving average.
- However, a trading range is more likely than a bear trend. This increases the risk of a deeper pullback than what the bears want.
- The bears want to get down to the 5,000 big round number as it is an obvious magnet for the market to test. The bulls know this and are likely interested in buying the test of 5,000.
- Overall, the selloff is strong enough that the market will likely have sellers above. The bears will likely need to form a more credible major trend reversal if they are going to get a test of the January 5th low, the bottom of the channel. This means that traders should be prepared for a possible deep pullback.
Emini 5-minute chart and what to expect today
- Emini is up 20 points in the overnight Globex session.
- The Globex market has rallied since the early morning hours and is trying to get a bull breakout of yesterday’s trading range.
- The bears will try their best to prevent the bulls from being successful.
- The Open of the U.S. Session will likely have a gap up which increases the odds of a second leg up early on during the session. This means that the downside is likely going to be limited.
- As always, traders should be patient on the open and consider waiting for 6-12 bars before placing a trade. This is because a trading range is more likely than a trend from the open.
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.
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.
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.
