Trading Update: Friday April 12, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini went outside yesterday after testing below the April 4^th bear breakout, which was likely to act as support.
• Wednesday’s Buy Signal bar was a small doji with a prominent tail above. This often indicates a potential market reversal, as the market may fall slightly and then reverse up, triggering the buy signal. This is exactly what happened today.
• While the bears have done a good job getting a bar completely below the moving average, the odds favor a trading range more than a bear trend.
• The bulls have had few opportunities to buy at the moving average since January. Now, they have a chance to buy below the moving average. This means that the downside is probably going to be limited.
• The bears likely need to create a more credible major trend reversal. This means that the market will likely need to go sideways for longer to develop more selling pressure.
• The daily chart is in a bull channel, meaning the odds favor the daily chart evolving into a trading range. The bears want to get down to the January low; however, they need more selling pressure, as mentioned above.
• If the bears can begin to create strong bear trend bars closing below the moving average, that will increase the odds of lower prices. Without it, the odds are the daily chart will continue to go sideways in the tight trading range.

Emini 5-minute chart and what to expect today

• Emini is down 40 points in the overnight Globex session.
• The Globex market went sideways for most of the overnight session and broke to the downside during the early morning hours. This increases the odds of the market getting a gap down on the open.
• The bears tested near yesterday’s 10:30 AM EST bottom of the bull channel.
• Traders should assume that the open will have a lot of trading range price action. This means that most traders should wait for 6-21 bars unless they can trade with limit orders and make quick decisions.
• In general, there is a 50% chance that the initial breakout is in the wrong direction and the market will attempt to go the other way.
• Today is Friday, so weekly support and resistance are important. The low of last week was 5,191.50, which is very close to the current price level. This means that traders should be mindful of this price as it will likely be a magnet today.
• Traders should be mindful of a possible surprise breakout late in the day as traders decide to close the weekly chart.
• Because the market is in an overall trading range on higher time frames (15–minute chart), traders should anticipate a possible rally on the open, lasting a few legs.

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 formed a downside breakout on April 10^th, trapping the bulls.
• The bears were able to get follow-through selling yesterday, increasing the odds of a second leg down.
• The bears are getting another strong breakout bar today. They are hopeful the three-bar breakout will lead to a measured move down. However, more likely, the bears will be disappointed by the selloff.
• The bulls are hopeful that the recent three-bar selloff will become a second-leg trap, trapping the bears into selling low in a trading range.
• Overall, the recent bear breakout is strong enough that the first reversal up will likely fail. The bears selling down here know that they are selling at support, and they will be quick to exit if the bulls begin to develop more buying pressure.

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.