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Emini Bears Want Reversal Down from Yesterday’s Bull Close

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Trading Update: Thursday April 20, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini gapped down below yesterday’s low and reversed up, forming a bull trend from the open. Bears want reversal down today.
  • Yesterday’s signal bar is a breakout pullback for the bulls. With so many bars overlapping each other over the past ten days, this increases the risk of sellers above yesterday’s high and more sideways.
  • The bears tried to get a bear breakout yesterday. However, the bulls bought early on the open, forming a bull trend day.
  • The bulls want the small pullback bull trend to continue and rally up to the February 2nd high.
  • The market has been in a trading range for over five months. This means traders should assume that a breakout above the February high will fail until there is a clear breakout with follow-through.
  • The channel up from the March 13th low is tight with a possible measuring gap (March 22nd high, April 6th low). The open gap increases the odds of a measured move up to 4,300. However, traders have to remember that the market is in a trading range.
  • If the bears can develop more selling pressure below the February 2nd high, the Emini may break out to the downside and close the March 22nd high gap.
  • The market is spending much time below the February 2nd high, which means bulls are hesitant to buy high. If traders were confident that the market was going above the February 2nd high, it would not be going sideways as it has been over the past 11 days.

Emini 5-minute chart and what to expect today

  • Emini is 26 points down in the overnight Globex session.
  • The Globex market formed a second leg down after yesterday’s late selloff into the close of the U.S. Session.
  • The market is currently testing yesterday’s Globex Low.
  • The bears want the market to gap down today and reverse yesterday’s bull close on the daily chart.
  • As I often say, traders should expect a trading range open and consider waiting for 6-12 bars before placing a trade.
  • The first 6-12 bars can give a trader a lot of information about the day, and since the open typically has frequent reversals, it is generally better to wait.
  • As I often say, most bears should wait for the opening swing trade to develop. The opening swing typically begins before the end of the second hour. There is generally a 40% chance that the range will double during that opening swing.
  • It is common for the opening swing to begin after forming a double top/bottom or a wedge top/bottom.
  • For the above reasons, most traders should focus on catching the opening swing since it is easier to structure the trade. Also, traders can generally go for two times their risk.
  • Overall, traders should expect a trading range open until there is a clear, strong breakout with follow-through. If today is going to be a trend day, there will be plenty of time to enter the direction of the trend, so it is typically better to wait for signs of a trend to develop.

Emini intraday market update

  • The Emini gapped down and rallied on the first three bars of the day.  The bulls tried to get a trend from the open, but the odds were unlikely because of the gap down.
  • With the first three bars being bull bars closing above their midpoints, the odds favored a trading range day or a bull trend day and not a bear trend day.
  • As of bar 45 (10:15 AM PT) the market is Always In Long and trying to reach yesterday’s close.
  • The bulls want the day to remain a bull trend day and for the market to close on its high. The bears want the market to go sideways, and selloff before the end of the day, creating a weaker bull bar on the daily chart.
  • Traders should pay attention to the midpoint of the day as that will likely be a magnet. The Since the low of the day is likely too far away, the best the bears can hope for is a close below the midpoint of the day.
  • As of bar 45, the best the bears can hope for is sideways until they can develop e more selling pressure.

Yesterday’s Emini setups

SP500 Emini 5-Min Double Bottom Weak Small Pullback Bull Trend From The Open. Bears want reversal down.

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. 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

EURUSD Daily: Market Want to Test April 13th High Close
  • The EURUSD has formed a tight bull channel since the March 15th low.
  • The bears are beginning to develop more selling pressure, increasing the odds of the channel evolving into a trading range soon.
  • It was reasonable to buy the April 13th high close and scale in lower. This means it is a magnet, and the market will probably have to reach it soon.
  • The bulls have a small micro double bottom and want today to break above yesterday’s high.
  • Overall, traders should expect sideways over the next week or two. The bulls got three strong bull bars last week. However, the bears got two decent bear bars following the breakout. A strong rally followed by a strong reversal typically creates sideways trading.

Summary of today’s S&P Emini futures price action

SP500 Emini 5-Min Bull Trend From The Open, Midday Reversal Down

Al created the SP500 Emini charts.

End of day video review

 

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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