Expert Analysis of S&P E-Mini Market Trends: What You Need to Know
- The S&P E-Mini formed a strong downside breakout last Friday, indicating a potential second leg down. However, the daily chart shows that the market is currently in a trading range.
- Both bulls and bears are actively buying near the midpoint of the August rally, anticipating a pullback in the near future.
- Currently, the market is undecided on the depth of the pullback for the bears.
- The tight channel up to the August high poses a challenge for bears, increasing the risk of a test of the August high.
- There is a possibility of a deep pullback from the September selloff, even if the market reaches the August high before the bears get their second leg down.
- While the odds favor a test of the September 6th close, bears selling at this level face bad risk-reward ratios and low probabilities of success.
- To increase their chances of success, bears may consider selling near the August highs to improve their risk-reward ratio.
- Overall, the daily chart is expected to move sideways in the coming days, with the potential for a second leg down for bears after the September selloff.
Insights into Today’s Market Outlook
- Today’s market is expected to open near yesterday’s close, with a failed downside breakout during the Globex session.
- Bulls managed to reverse the downward trend post the 8:30 AM EST report bar, indicating a possible strong bull trend day.
- However, bulls need to break out above the two-day trading range to avoid a failed breakout scenario.
- Traders can anticipate a sideways to upward movement at the open, following the recent Globex rally.
- It is advisable to wait for clarity on the open to determine the market direction and potential trend formation.
Review of Yesterday’s E-Mini Setups
Here are the stop-entry setups from yesterday, with green arrows indicating buy entries and red arrows indicating sell entries. Traders can refer to detailed explanations of swing trade setups in the Brooks Trading Course and Encyclopedia of Chart Patterns.
It is crucial to note that not all swing setups result in trades, and traders should manage risk accordingly. For traders with smaller accounts, considering trades with lower risk or exploring alternative markets like the Micro E-Mini may be advisable.