Trading Update: Thursday April 11, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini sold off yesterday, testing below the April 4^th low.
• The bears are hopeful that this is the start of the second leg down and test of 5,100. However, more likely, there will be buyers not far below the April 4^th low.
• The bulls formed a weak second entry buy yesterday. This reduces the odds that there will be eager bull buying above yesterday’s high.
• Because yesterday is the first moving average gap bar, with the bar completely below the moving average, traders will want to see if there are more buyers or sellers above. This means that yesterday’s high is a magnet for the market today.
• The bulls will try their best to get a follow-through bar closing above the prior day’s high. This would be a sign of strength by the bulls and increase the odds of a second leg up.

Emini 5-minute chart and what to expect today

• The Emini rallied during the 8:30 AM EST report, forming a strong outside up bar. This bar is enough of a surprise that traders will expect a second leg up.
• The bears are hopeful that the rally up to 9:15 AM EST is going to form a parabolic wedge top that will lead to an early high of the day for the U.S. Session.
• As always, traders should anticipate a trading range open and for the market to go sideways for several bars.
• Most traders should wait for the opening swing that often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
• Overall, because of the rally early this morning, the odds favor an attempt at a second leg up or a trading range on the open. Less likely, the market will form a bear trend.

Yesterday’s Emini setups

Al created the SP500 Emini charts.

Here are reasonable stop entry setups from yesterday. 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.

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 has been breaking out below the low for the past several days and testing the February 14^th low.
• Yesterday’s bear breakout is a surprise. Therefore, the odds favor a second leg down.
• The bears want today to become a strong follow-through bar closing on or near its low. This would trap limit order bulls.
• While the market is probably Always Short based on yesterday’s bear breakout, the breakout might be a sell vacuum test of the bottom of the trading range.
• Bears selling below yesterday’s low run the risk of getting trapped selling at the bottom of the trading range therefore they will be quick to exit if the market starts to reverse up.
• Overall, traders are waiting to see what kind of follow-through selling the bears get today. The bigger the follow-through bar, the higher the probability that the bears will get a downside breakout. More likely, the bears are going to be disappointed today or tomorrow with the follow-through.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

End of day video review

Live stream videos to follow Monday, Wednesday and Friday (subject to change).

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.