S&P 500 E-Mini Testing Moving Average

 | Apr 29, 2024 09:46AM ET

h2 S&P Emini Pre-Open Market Analysis
  • The S&P 500 Emini has rallied for two legs and is testing the moving average, which is important resistance above.
  • Last Thursday, an outside up bar was formed, and the bulls tried to close above it last Friday. However, the bulls were unable to do so due to the resistance above.
  • The bears want to form a reversal bar today or tomorrow, closing on its low. This would be a second entry short at the moving average.
  • The daily chart is in a trading range, and the probability of a breakout up or down is closer to 50%.
  • The bears expect a second leg down of the April selloff. However, the reversal up over the past five trading days is enough to make the market a trading range. This increases the probability that there are buyers below, near the 5,000 round number and the April 25th low.
  • Traders will pay close attention to see what kind of signal bar the bears can get for the second entry short at the moving average.
  • If today is a bear bar closing on its low, there is an added risk of a test of 5,000 and the April low.
  • The bulls want to prevent the bears from getting a bear reversal bar closing on its low. They are hopeful that the next day or two will get an upside breakout above the moving average.
  • Next, they would want a measured move-up for the bear flag from the April 19th low to the April 25th high, projecting up.
  • Overall, traders will pay close attention to how determined the bears are to get a reversal bar.
h3 What to Expect Today/h3
  • The Emini has been in a trading range for most of the overnight session.
  • The market will probably test above last week’s high (5,146.5) and trigger the buy signal bar on the weekly chart.
  • There will probably be sellers above, and the market will pull back briefly. If this happens, the bull may try to break above the Lask week’s high later today.
  • Traders should assume that today, there will be a lot of trading range price action on the open. This means traders should be patient and not rush to trade.
  • Most traders should wait 6-12 bar before placing a trade unless they can make quick decisions.
  • The Globex range is small (around 13 points); this increases the odds that the U.S. Session will expand the range, meaning there is potential for a breakout on the open.
  • Tomorrow is the final trading day of the month. The bears want April to close below the March low (5,126.5), which would end the 6-bar bull micro channel on the monthly. This price level will likely be a magnet for the next two days.
  • There is an 80% chance of a trading range open and only a 20% chance of a trend from the open. This means the market will likely be for a double top/bottom or a wedge top/bottom on the open, creating a trading range.
  • Most opens have an opening swing.
  • Because of what I said above regarding the Globex range being small, traders should look for an opening swing to double the range of the Globex market. This means there is potential for a swing trader to last two legs and two hours, beginning before the end of the second hour.
  • Lastly, being patient is the most important thing on the open. If one is confused regarding how to trade the market in front of them, they are best stepping aside until they are equipped to trade the current market conditions.
h2 Yesterday’s Emini Setups/h2
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