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Emini Bulls Want Test of 5,300

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Trading Update: Friday May 3, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini found buyers below yesterday’s low after the bears were disappointed by the lack of strong follow-through after Tuesday’s downside breakout.
  • The bulls are hopeful that yesterday is forming a double bottom higher low major trend reversal that will lead to an upside breakout, and test of 5,300.
  • The problem for the bulls is that the major trend reversal pattern does not have enough bars, and yesterday’s buy signal bar is forcing traders to buy in the middle of a tight trading range, just below the moving average.
  • The bears are hopeful that the tight trading range over the past 13 trading days is a bear flag that will lead to a downside breakout below the April low.
  • The higher time frame context is working against the bears. The daily chart has been in a strong bull trend since early November and recently formed a trendline break, down to the April low. While the trendline break is strong on the daily chart, it is a minor reversal. Therefore, traders will expect a retest of the highs in order to relieve the trapped bulls.
  • This means that the market may have to test closer to 5,300 and develop a more credible top.
  • Overall, the bulls have a strong entry above yesterday’s buy signal bar. Traders will pay attention to see what kind of entry bar today will become. If today, there is a strong bull entry bar closing on its high; it will increase the odds of a second leg and lead to higher prices. The Bears want any rally today to become a 2nd leg bull trap. Next, they will want a test back down to the April low.

Emini 5-minute chart and what to expect today

  • Emini is up 53 points in the overnight Globex session.
  • The bulls recently formed a strong upside breakout on the 15-minute chart during the 8:30 AM EST report bar.
  • The rally on the FOMC was a big enough surprise to likely get a second leg up, even though the market went below the breakout.
  • It is common in trading ranges for breakouts in the middle of the range (60-minute chart) to have deep pullbacks, even below the breakout, that still get second legs.
  • While today’s 8:30 AM EST breakout is strong, looking at a 60-minute Globex chart, it is a second leg up in a trading range. This increases the risk of a failed breakout.
  • At the moment, today’s upside breakout is strong enough for higher prices and another leg up.
  • Traders will pay attention to see what kind of follow-through buying the market will get on the open of the U.S. Session.
  • Because the gap up is large, the odds favor a second leg up. A gap is a breakout and breakouts often get second legs.
  • However, the market is far from the moving average. Therefore, traders might be hesitant to buy this far from the moving average. This means that the market may have to pull back closer to the average price (moving average) before traders are willing to buy.
  • The bears want to get a reversal from the top of a trading range on the higher time frames. The bears will need a strong downside breakout if they are going to get a reversal of the gap up.
  • Today is Friday, so weekly support and resistance are important. Traders should be ready for a surprise breakout late in the day as traders decide on the close of the weekly chart.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Parabolic Wedge Bottom

Al created the SP500 Emini chart.

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

SP500 Emini 5-Min Chart Low 2 Top Wedge Bull Flag Then Sideways

Richard created the SP500 Emini chart (Al travelling).

End of day video review

End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.

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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