S&P 500 E-Mini: Second-Leg Trap Is Likely

ESU3
-0.32%

Add to/Remove from Watchlist

Add to Watchlist

Add Position

Position added successfully to:

Please name your holdings portfolio

Type:

BUY
SELL

Date:

Amount:

Price

Point Value:

Leverage:

1:1
1:10
1:25
1:50
1:100
1:200
1:400
1:500
1:1000

Commission:

Create New Watchlist
Create

Create a new holdings portfolio
Add
Create

+ Add another position
Close

S&P Emini Pre-Open Market Analysis

• The S&P 500 Futures daily chart is forming a possible 2nd leg trap. The Bulls got a bull breakout with follow-through last week. However, it is a second leg up in the middle of an overall trading range.
• The bulls are hopeful that last week’s rally is strong enough for another leg up. Some bulls will scale in on any pullback.
• The bulls scaling into longs risk getting trapped by the possible 2nd leg trap.
• The bears are hopeful that the selloff over the past few trading days is strong enough to lead to a second leg down.
• The bears want to close the August 24 breakout point high, and the bulls will try their best to keep it open.
• Overall, traders will pay close attention over the next few days to see what kind of follow-through selling the bears can get. The bulls will try and reverse the market to end the possibility of a second leg trap.

Emini 5-minute Chart and What To Expect Today

• Emini is down 10 points in the overnight Globex session.
• The overnight Globex market has been in a bear channel for several hours.
• The bulls will try and convert the bear channel into a trading range and get a rally on the open.
• Traders should expect a trading range open in the U.S. Session. This means traders should be ready for a limit order market.
• There is at least an 80% chance of a swing trade developing after the formation of a double top/bottom or a wedge top/bottom. It is common for the swing trade to form before the end of the second hour.
• If traders want a higher probability, they should wait for a clear breakout with follow-through.
• Lastly, traders should pay attention to yesterday’s low and the day’s open, as both will likely be magnets during the U.S. Session.

Yesterday’s Emini Setups

SP500-Emini-5-Minute-Chart

Source