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Emini Bears Hopeful Rally Is Buy Vacuum Test of 4,300

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Trading Update: Tuesday June 6, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The bulls have two bar breakout on June 2nd that is testing 4,300. Bears hopeful this rally is a buy vacuum test of resistance, the 4,300 big round number.
  • While it is possibly a buy vacuum, it is a bull breakout above almost 200 days. This is enough of a surprise, that the recent breakout will probably get a 2nd leg up.
  • The bears want to trap the bulls into buying high in a large trading range since August of last year. However, the bears will need to develop more selling pressure if they are going to trap the bulls. At a minimum, the bears will need a micro double top.
  • The August high is a likely magnet above, and the market will probably have to test closer to it. The bulls bought the August 2023 rally, and they got trapped by the endless pullback down to the October 2022 low.  
  • The bulls who bought the August 2022 rally took a reasonable trade; this means that if they used a wide stop and scale in lower, they have a 60% chance of being able to exit back at their original entry price. This means there is a 60% chance or higher that the market will have to test closer to the August 2022 high.
  • It is possible that the market falls below the October 2022 low before it reaches the August 2022 high. However, at the moment, the market will probably test the August 2022 high first.

Emini 5-minute chart and what to expect today

  • Emini is down 3 points in the overnight Globex session.
  • The overnight Globex market has been in a tight trading range since yesterday’s U.S. Session close.
  • Today will probably have a lot of trading range price action.
  • The bulls want the day to close on its high and form a strong H1 buy setup on the daily chart.
  • The bears want to form a strong entry bar following yesterday’s bear reversal bar.
  • As I often say, traders should assume that the first 6-12 bars will have a lot of trading range price action. This means that most traders should consider not trading during this time unless they are comfortable with limit orders.
  • Most traders should try and catch the opening swing that often begins before the end of the second hour. It is common to get a swing trade after forming a double top/bottom or a wedge top/bottom.
  • Lastly, since the day will probably have a lot of trading range price action, traders should pay close attention to the day’s open, as it will likely be a magnet for most of the day.  

Yesterday’s Emini setups

SP500 Emini 5-Min Wedge Bottom Then Midday Reversal Down. Emini Bears Hopeful Rally Is Buy Vacuum Test of 4,300

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: Buyers Below May 31st
  • The EURUSD is getting a second leg down after the June 2nd bear reversal bar.
  • While the selloff over the past three days has been good for the bears, it will probably be limited.
  • The reversal up on June 1st was strong enough to have buyers below the bar likely.
  • The market has not touched the moving average of 18 bars which is a sign of strength by the bears. However, the market is beginning to develop buying pressure, which increases the odds that the market will need to test the moving average soon.
  • The moving average reflects the fair price, and traders are only willing to sell below the fair price (sell cheap) if the market has strong momentum behind it. The bears are losing momentum here, so traders will likely want to sell closer to the fair price (moving average).
  • The bulls know that the market will likely need to touch the moving average, so they will begin buying new lows betting on a reversal up.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Wedge Top Then Trading Range

Al created the SP500 Emini charts.

End of day video review

Today’s End Of Day review will be presented in the Trading Room and only available to the trading room subscribers.

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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