S&P 500 E-Mini Daily Chart Likely to Test Moving Average Soon
Al Brooks | Apr 01, 2024 09:42AM ET
- The S&P Emini is testing near that March 21st high and will probably find sellers near its high and test the moving average soon.
- The daily chart is likely converting into a trading range. This means that the odds are beginning to favor breakout points such as the March 8th high closing.
- While a trading range is likely to form soon, the bears need to show more signs of strength before traders conclude that they are gaining control.
- Ideally, the bears need two strong bear closes below the moving average or 3-4 average bar bars completely below the moving average before traders will conclude that the market is in a trading range.
- Even if the bears can close below the moving average, the downside is probably limited due to the strength of the small pullback bull trend.
- Emini is up 1 point in the overnight Globex session.
- The Globex market sold off during the early morning hours and is going to open near last Thursday’s close.
- Traders should be neutral going into the opening of the U.S. Session.
- There is an 80% chance of a trading range open and only a 20% chance of a trend from the open.
- This means there is at least an 80% chance that the market will form a double top/bottom or a wedge top/bottom on the open.
- Most traders should wait for one of the patterns mentioned above to form and try to catch the opening swing that often begins before the end of the second hour.
Here are reasonable stop-entry setups from last Thursday, before US market holiday Friday. 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.
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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.
/h2
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