Emini Resistance at Daily Moving Average and 5,400 Round Number

Trading Update: Tuesday August 13, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini formed a weak bear bar yesterday. This was due to the market getting close to the daily 20-period moving average and the 5,400-round number. Both are important magnets that are likely to get tested.
• This increased the odds of buyers below yesterday’s low, which is why the Emini gapped up today.
• The daily chart will likely find resistance around the moving average and the 5,400-round number. This increases the odds of the daily chart getting a couple of legs sideways down over the next several days.
• Today has the potential to be a bear reversal bar at the moving average and a stop entry short for the bears. While this would be good for the bears, the channel up from the August 5^th low is tight, which increases the odds of buyers not far below.
• Overall, the odds favor a trading range on the daily chart. This means that there are likely sellers above. However, the bears may not sell until the daily chart reaches the upper third of the range, near the 5,600-round number.

Emini 5-minute chart and what to expect today

• The Emini gapped up on the open and went sideways for the first 12 bars of the day. This increases the odds that there will be a lot of trading range price action today.
• The 5,400 round number is an important magnet today and will likely get tested. This will make traders question any of the rallies above 5,400 since the market is likely to fall below it today.
• The bulls are hopeful that 13 is a double bottom with bar 1 and will lead to the low of the day.  The signal bar is big (bar 13) and in the middle of the day’s range. This increases the odds of it leading to a trading range and not a built trend.
• The Globex 5-minute chart has been in a bull trend since 7:00 AM EST. The rally up to bar 4 during the U.S. Session is part of a tight bull channel. This increased the odds that the rally up to bar 4 would close by getting retested, which is what happened on bar 15.
• The rally up to bar 16 is strong and it is a possible bull breakout above the neckline (bar5) of a double bottom.  The bulls are hopeful that the rally will lead to a measured move up of the first 12 bars.
• The bears are hopeful that the rally up to bar 20 is a wedge top (12, 16, 20), and the market will reverse down.
• The bulls formed an 8-bar bull micro channel up to bar 20. This reduces the probability that the market will reverse without first getting more selling pressure.

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 second leg up today after the August 5^th and 6^th bull breakout.
• While the August 5^th bull breakout was disappointing for the bulls in an overall trading range, the odds favored at least a small 2^nd leg up.
• The bulls are allowing too many deep pullbacks after the upside breakouts. This allows bears to make money selling above bars, increasing the odds of the trading range continuing.
• While the bulls have done a good job with today’s upside breakout, they need follow-through. The bears will try their best to prevent the bulls from getting a strong follow-through bar tomorrow.
• Overall, the odds favor the bulls getting disappointed by the follow-through since the daily chart is in an overall trading range.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

End of day video review

End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.

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

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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.

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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.

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