S&P 500 E-Mini Breaks Out of Triangle

S&P Emini Pre-Open Market Analysis

Emini Daily Chart

• The is getting an upside breakout of the triangle, which is a tight trading range on the daily chart.
• The Bears are hopeful that the bull breakout will be the final flag of the March tight trading range.
• Yesterday’s bull breakout is strong enough to get a second leg up. This increases the odds that the first reversal down will fail, and the bulls will get a second leg up.
• The 5,300 Big Round Number is within reach and will probably get tested today or tomorrow.
• Overall, the bears will try their best to undo the damage caused by yesterday’s bull breakout bar. They need to prevent the bulls from getting another follow-through bar and, ideally, create a bear reversal bar, closing on its low.

What to Expect Today

• The Globex market has gone sideways for most of the overnight session.
• The bulls are hopeful that today will create follow-through buying after yesterday’s upside breakout.
• Yesterday’s rally was climactic, which increases the odds that the open will have a lot of trading range price action.
• There is a 75% chance that today, there will be a trading range lasting two hours, beginning before the end of the second hour. There is a 50% chance that bulls will get follow-through buying on the open, followed by a trading range beginning before the end of the second hour. There is only a 25% chance of a trend from the open.

Yesterday’s Emini Setups

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.