Emini Bulls Want Breakout Follow-through

Table of Contents

Trading Update: Thursday May 18, 2023

S&P Emini pre-open market analysis

Emini daily chart

The bulls got an upside breakout of the tight trading range, a triangle. However, the market has not broken out of the trading range that began over a month ago.
The bulls closed above the past 10 bars, which is a sign of strength, but they need to get breakout follow-through buying today or tomorrow.
The bears will see yesterday as an opportunity to disappoint hopeful bulls betting on a breakout.
At the moment, it looks like the market will not get an upside breakout.
Since the market is in a trading range, there is an increased risk of the bulls getting a failed breakout.
Traders will pay close attention to today’s price action to see if the bulls can get follow-through buying.
The market is in a triangle which is a breakout mode pattern, and bears are trapped. If the bears begin to give up and buy back shorts, the bulls will buy aggressively, which could cause a strong upside breakout above the February 2^nd high.
The most important thing to realize is that the market is still in a trading range, and yesterday might become a failed breakout, trapping bulls into buying high in a trading range. This means that the bears have an opportunity to get a strong bear reversal bar today.

Emini 5-minute chart and what to expect today

Emini is down 2 points in the overnight Globex session.
The Globex market went sideways during the overnight hours and got an upside breakout above yesterday’s high early this morning.
The bulls want today to have follow-through buying in the form of a strong bull trend during the U.S. Session.
The bears want the opposite.
Traders must be open to anything today. The bulls have a reasonable chance of getting strong follow-through and a bull trend day. This means traders cannot be in denial if the open starts to form strong bull trend bars.
Because of the strong buying yesterday, the open will probably have a lot of sideways trading.
Traders must be aware that the bears will try their best to prevent the bulls from getting follow-through buying today. This means that the bears, at a minimum, want the market to close below the day’s open.
As I often say, traders should expect the open to have a lot of limit order trading for the first 6-12 bars. This means traders should consider stepping aside for at least 6 bars on the open.
While the market may form a trend from the open, it will probably not. Also, even if it forms a trend from the open, there is a 50% chance the initial move will completely reverse. There is an 80% chance that the initial move will get at least a minor pullback.
Overall, traders must be open to anything and not be in denial of the price action. As Al often says: “Price is Truth,” meaning that a trader cannot deny what the chart is telling them.

Emini intraday market update

The Emini triggered the buy above yesterday’s bull breakout on the daily chart. The bulls need to get strong bull closes above yesterday’s high, or else traders will bet that it will lead to a failed breakout.
So far, the rally up to bar 10 is strong enough for a second leg, but the Bulls need strong closes above yesterday’s high.
The Bulls got a strong rally up to bar 13. However, it is a possible parabolic wedge top, and the market is probably going to go sideways soon for a couple of hours.
So far this is good follow-through for the bulls after yesterday’s bull breakout on the daily chart.
As of bar 19, the market is Always In Long, and it is better to wait for more selling pressure to develop before looking to sell.

Yesterday’s Emini setups

SP500 Emini 5-Min Sell Climax Then Small Pullback Bull Trend

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. 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.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

The EURUSD is Always In Short, following the bear breakout that ended on May 12^th
the follow-through selling is strong enough that the first reversal up will probably be minor. This means the best the bulls can get is sideways until they can develop more buying pressure.
The market will probably test the March 24^th low (green low). This was the start of the bull channel that ended on May 5^th.
The bears want a strong breakout below March 24^th; however, since the market is in a trading range, they will likely become disappointed soon.
It’s possible the selloff from May 4^th is a small pullback bear trend that breaks far below the March 24th low and reaches the lows of the year.
The bulls want a double bottom with any prior higher lows in the bull channel that began on March 24^th. However, the bulls will need to develop more buying pressure before traders are convinced the bulls have a credible shot at taking control. At a minimum, the bulls will need a micro double bottom. Otherwise, traders will expect any reversal to be minor.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

End of day video review

Al Brooks will host an End of Day review at 1:30pm PT / 4:30pm ET: https://www.youtube.com/watch?v=WQV3tXmh_CA

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

Trading Room

Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room days. We offer a 2 day free trial.

Charts use Pacific Time

When times are mentioned, it is USA Pacific Time. The Emini day session charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.