Emini Daily Chart
- The E-Mini formed a triangle and surprisingly broke above the May 1st high. Nonetheless, despite their efforts, the bears were able to overpower the bulls, and the market had a strong reversal down yesterday. Due to this, the market is expected to test the triangle apex and reach the May 17th low which is the bottom support level where the bull breakout occurred.
- The bulls were able to form a high 1 buy with Monday’s close. However, it was a high 1 buy, and the fact that it happened at the top of a trading range reduces the probability for the bulls.
- The bears ultimately had a strong bear breakout yesterday. They need a strong follow-through today and another big bear bar closing on its low.
- The bulls will try their best to prevent the bears from getting another strong bear breakout bar today.
- Currently, there are bulls who are trapped as they bought the May 22 low. These bulls are deciding whether to sell or hold on to see if the market bounces back. There may be sellers at the May 22nd low.
- Overall, the bulls are trapped, and if the bears can get a follow-through either today or tomorrow, it will increase the probability of lower prices. However, it is more likely that today will disappoint both the bulls and the bears.
Emini 5-Minute Chart and Expectations for Today
- The E-Mini is down 20 points in the overnight Globex session.
- The overnight Globex market sold off after yesterday’s strong bear channel down.
- Today will probably have at least two hours of sideways trading since yesterday’s sell-off was climatic. It means that the open will have a lot of trading range trading.
- Most traders should wait for 6-12 bars unless they are comfortable with limit orders.
- There is a greater than 80% chance of a swing trade happening before the end of the second hour. Traders should focus on catching the opening swing, which often happens after forming a double top/bottom or a wedge top/bottom.
- Traders should expect a trading range day, but it is open to possible trend day since the bears will try to get a follow-through after yesterday’s bear trend.
Yesterday’s Emini Setups
Here are several reasonable stop-entry setups from yesterday. The buy entry is indicated with a green rectangle, while the sell entry is in a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a 4-year library of more detailed explanations of swing trade setups (see Online Course/BTC Daily Setups). Encyclopedia members can see current daily charts added to the Encyclopedia.
The charts are tailored to present an Always In perspective. If a trader aims to be Always In or nearly Always In a position all day, and is not currently in the market, these entries would come in handy for him/her. These, therefore, are swing entries.
However, it is important to note that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit opt to get out with a negligible profit (scalp) but usually 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 E-Mini.