S&P 500 E-Mini Bears Need Follow-Through Selling

Emini daily chart

• The S&P 500 Futures formed a large bar, closing near it low. The bears hope today will have follow-through selling, leading to the start of the selloff that tests down to the October 17^th high.
• More likely, there are buyers near the moving average, and the market will continue to go sideways.
• The Bears need to get strong follow-through selling if they will break below the moving average successfully.
• While there are probably buyers below yesterday’s low, there are also likely sellers around yesterday’s midpoint.
• The odds are high that the market will reach the moving average in the next few days or weeks. This means the market will likely have difficulty going much higher without first getting the moving average.
• Because the daily chart is in a trading range, traders must be open to a test of the midpoint of the November rally, which is near 3,464.

Emini 5-minute chart and what to expect today

• Emini is up 20 points in the overnight Globex session.
• The market formed an upside breakout following the 8:30 AM EST report. The bulls want the rally to continue well into the U.S. Session and create a bull trend from the open.
• More likely, the market will form a trading range open as it typically does 80% of the time.
• As I often say, traders should be patient during the opening session. This means that traders should consider not trading for the first 6-12 bars unless they can make quick decisions and anticipate breakouts failing to go far.
• Most traders should focus on the opening swing that often begins before the end of the second hour, after forming a double top/bottom, or a wedge top/bottom.
• Traders should pay attention to yesterday’s low and yesterday’s midpoint since both will likely be important magnets.

Yesterday’s Emini setups

Emini Price Chart

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.