Stock Markets Analysis & Opinion

S&P 500 E-Mini: Bulls Seek High 1 Buy Signal


S&P Emini Pre-Open Market Analysis

  • The S&P Emini pulled back over the past two trading days after last week’s strong rally.
  • The bulls are hopeful that today will form a High 1 Buy Signal
  • The odds favor a second leg up after the rally that began on October 6th. However, the pullback last Thursday and Friday is a warning that the market is in a trading range.
  • The bears who sold the September 29th high and scaled in higher made money. Which is a sign that the market is in a trading range.
  • Overall, traders should expect a second leg up.

What to Expect Today

  • Emini is up 20 points in the overnight Globex session.
  • The overnight Globex market formed a second leg up after a pullback during the overnight hours.
  • There is an 80% chance that today will become a trading range open and only a 20% chance of a trend from the open.
  • Most traders should wait 6-12 bars before placing a trade unless they are comfortable with limit orders and making quick decisions.
  • Most traders should try and catch the opening swing that often begins before the end of the second hour.
  • It is common for the market to form the opening swing after the formation of a double top/bottom or a wedge top/bottom.
  • Traders should pay attention to yesterday’s high and the open of the day.

Friday’s Emini Setups

S&P 500 Emini-5-Min Chart

Here are reasonable stop-entry setups from Friday. 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 the 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.


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