S&P 500 E-Mini Bounce Likely to Continue for a Few Days

 | Apr 17, 2024 09:45AM ET

h2 S&P Emini Pre-Open Market Analysis
  • The S&P 500 Emini formed a follow-through bar yesterday. However, yesterday’s bar is small compared to last Friday’s bear breakout. This is a sign of the momentum getting weaker and increases the odds of a pullback.
  • The market is probably Always In Short because it is far below the moving average.
  • However, a trading range is more likely than a bear trend. This increases the risk of a deeper pullback than what the bears want.
  • The bears want to get down to the 5,000 big round number as it is an obvious magnet for the market to test. The bulls know this and are likely interested in buying the test of 5,000.
  • Overall, the selloff is strong enough that the market will likely have sellers above. The bears will likely need to form a more credible major trend reversal if they are going to get a test of the January 5th low, the bottom of the channel. This means that traders should be prepared for a possible deep pullback.
h2 What to Expect Today/h2
  • Emini is up 20 points in the overnight Globex session.
  • The Globex market has rallied since the early morning hours and is trying to get a bull breakout of yesterday’s trading range.
  • The bears will try their best to prevent the bulls from being successful.
  • The Open of the U.S. Session will likely have a gap up which increases the odds of a second leg up early on during the session. This means that the downside is likely going to be limited.
  • As always, traders should be patient on the open and consider waiting for 6-12 bars before placing a trade. This is because a trading range is more likely than a trend from the open.
h2 Yesterday’s Emini Setups/h2