Emini daily chart
- On the previous day, the Emini market opened lower and tested the May 16th low and the apex of the month-long triangle before reversing up.
- Expect a short-term bounce over the next day or two as traders take profits. However, the market’s selloff was strong enough that another leg down is likely, even if there is a deep pullback first.
- The bulls who bought the close of May 17th or the low two bars later are likely to use any bounce to exit their losing trade with a smaller loss or breaking even if they scale in lower.
- The bears know that the bulls are trapped and will sell any rally from here on expecting the bulls to exit long positions.
- There are also bears who sold the May 4th high and got trapped on the May 5th breakout. Those bears could not exit their losing trade back at the May 4th high. This means the market will probably reach the May 4th high level of 4,238.50 and allow the trapped bears out of their trade.
- Overall, the bears expect another leg down after the recent four-bar selloff from the May 19th high. The bears aim to break below the May 4th low and reach the significant round number of 4,000. However, if they are going to reach 4,000, they need to present more signs of strength.
Emini 5-minute chart and what to expect today
- The Emini market is up by 30 points in the overnight Globex session, indicating that there will be some positive movement in the short term.
- The Globex chart went sideways for most of the overnight session until rallying late in the session.
- On the 60-minute Globex chart, the bulls have broken above the bear trendline (May 23rd – May 24th). The bulls want to form a major trend reversal; however, they will most likely need to test the low of the Globex session at 4,1355.5 before establishing a credible high-low significant trend reversal.
- The bears hope for a large double-top bear flag and trend resumption down.
- Traders should expect the US session to have a lot of trading range trading, so patience might be necessary to make the right trades.
- As Al Brooks advises, most traders should wait for 6-12 bars before placing a trade unless they are comfortable with limit order trading.
- Most traders should focus on catching the opening swing that often begins before the end of the second hour.
- The opening swing usually occurs after the formation of a double top/bottom or a wedge top/bottom. This gives a trader the chance to enter on a stop-entry and enjoy great risk/reward on a reasonable swing trade.
- The most critical thing to remember is to be open to anything happening and never deny what is happening on the chart.
Yesterday’s Emini setups
Here are several reasonable stop-entry setups from the previous day. Each buy entry is shown 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.
The 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 essential 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 high for your account, you should wait for trades with less risk, or trade an alternative market like the Micro Emini.