E-Mini Bears Hopeful Rally Is Buy-Vacuum Test of 4,300

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S&P Emini pre-open market analysis

Emini daily chart

• The S&P 500 Futures bulls have two bar breakout on June 2nd that is testing 4,300. Bears hopeful this rally is a buy vacuum test of resistance, the 4,300 big round number.
• While it is possibly a buy vacuum, it is a bull breakout above almost 200 days. This is enough of a surprise, that the recent breakout will probably get a 2nd leg up.
• The bears want to trap the bulls into buying high in a large trading range since August of last year. However, the bears will need to develop more selling pressure if they are going to trap the bulls. At a minimum, the bears will need a micro double top.
• The August high is a likely magnet above, and the market will probably have to test closer to it. The bulls bought the August 2023 rally, and they got trapped by the endless pullback down to the October 2022 low.
• The bulls who bought the August 2022 rally took a reasonable trade; this means that if they used a wide stop and scale in lower, they have a 60% chance of being able to exit back at their original entry price. This means there is a 60% chance or higher that the market will have to test closer to the August 2022 high.
• It is possible that the market falls below the October 2022 low before it reaches the August 2022 high. However, at the moment, the market will probably test the August 2022 high first.

Emini 5-minute chart and what to expect today

• Emini is down 3 points in the overnight Globex session.
• The overnight Globex market has been in a tight trading range since yesterday’s U.S. Session close.
• Today will probably have a lot of trading range price action.
• The bulls want the day to close on its high and form a strong H1 buy setup on the daily chart.
• The bears want to form a strong entry bar following yesterday’s bear reversal bar.
• As I often say, traders should assume that the first 6-12 bars will have a lot of trading range price action. This means that most traders should consider not trading during this time unless they are comfortable with limit orders.
• Most traders should try and catch the opening swing that often begins before the end of the second hour. It is common to get a swing trade after forming a double top/bottom or a wedge top/bottom.
• Lastly, since the day will probably have a lot of trading range price action, traders should pay close attention to the day’s open, as it will likely be a magnet for most of the day.

Yesterday’s Emini setups

SP500-Emini 5-Min Chart

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