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Emini Disappointing Follow-through after Thursday’s Bear Breakout

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Trading Update: Monday April 8, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini closed below the 20-day exponential moving average last week for the first time since January. However, as expected, the follow-through for the bears was disappointing.
  • This is a sign of increasing selling pressure on the daily chart.
  • While the bears are doing a good job of increasing the selling pressure, the odds favor trading on the daily chart and not a bear trend. This means that the downside is likely limited.
  • As expected, traders were happy to buy at the daily moving average, which created a bull reversal bar and bad follow-through after Thursday’s downside breakout.
  • Overall, traders should expect the daily chart to continue trending sideways and converting into a trading range.

Emini 5-minute chart and what to expect today

  • Today, there will probably be a lot of trading range price action on the open as traders decide on the direction of the opening swing.
  • The bears want follow-through selling following last Thursday’s bear breakout, and the bulls want a strong entry bar following last Friday’s bull reversal bar.
  • As always, most traders should wait 6-12 bars before placing a trade unless they can use wide stops and trade with limit orders.

Emini Intra Day Update

  • The has gone sideways for the first 9 bars, inside of Friday’s end-of-day tight trading range. This is a continuation of last Friday’s tight trading range, which is breakout mode.
  • Traders should assume that the probability of a breakout is very close to 50% for both the bulls and bears.
  • If one side had high probability, the market would not be in a tight trading range.
  • Because the Globex session formed a 3-bar breakout with bar 1 being the final bar, there is an increased risk that the bears will get a second leg down. The bulls want the opposite and to trap the bears.

Friday’s Emini setups

SP500 Emini 5-Min Chart Pullback from Yesterday Selloff Then Trading Range

Richard created the SP500 Emini charts (Al travelling).

Here are reasonable stop entry setups from Fri. 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 High 1 buy signal bar last Friday, following the strong reversal up on April 2nd.
  • While this is good for the bulls, and the odds favor a second leg up, Friday’s High 1 buy signal bar is a doji, which increases the odds of a pullback followed by a second leg up.
  • The bulls want to trap the bears into selling above Friday’s high 1. Next, they want today to become a strong entry bar, trapping the bears in a bad, short position.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Trading Range Day Broad Then Tight Trading Range

Richard created the SP500 Emini charts (Al travelling).

End of day video review

Live stream videos to follow Monday, Wednesday and Friday (subject to change).

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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