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Emini Bears Need Follow-Through Selling

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Trading Update: Thursday December 7, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed a large bar, closing near it low. The bears hope today will have follow-through selling, leading to the start of the selloff that tests down to the October 17th high.
  • More likely, there are buyers near the moving average, and the market will continue to go sideways.
  • The Bears need to get strong follow-through selling if they will break below the moving average successfully.
  • While there are probably buyers below yesterday’s low, there are also likely sellers around yesterday’s midpoint.
  • The odds are high that the market will reach the moving average in the next few days or weeks. This means the market will likely have difficulty going much higher without first getting the moving average.
  • Because the daily chart is in a trading range, traders must be open to a test of the midpoint of the November rally, which is near 3,464.

Emini 5-minute chart and what to expect today

  • Emini is up 19 points in the overnight Globex session.
  • The market formed an upside breakout following the 8:30 AM EST report. The bulls want the rally to continue well into the U.S. Session and create a bull trend from the open.
  • More likely, the market will form a trading range open as it typically does 80% of the time.
  • As I often say, traders should be patient during the opening session. This means that traders should consider not trading for the first 6-12 bars unless they can make quick decisions and anticipate breakouts failing to go far.
  • Most traders should focus on the opening swing that often begins before the end of the second hour, after forming a double top/bottom, or a wedge top/bottom.
  • Traders should pay attention to yesterday’s low and yesterday’s midpoint since both will likely be important magnets.

Emini intraday market update

  • The Emini went sideways for the first 68 bars on the open.
  • The bulls formed an upside breakout on bars 9- 11. This was a strong enough breakout to make the market either in a bull trend or a trading range day.
  • The bears formed a selloff down to bar 22. The downside breakout was strong enough that the odds favored at least a small second leg down. However, the bulls got the upside breakout and test of the bar 13 high.
  • As of bar 42, the bears are trying to prevent the bulls from getting a successful upside breakout of the day’s range. The bears are hopeful that the market is still in a trading range and that the market will test back down to the middle of the day’s range.
  • If the bears can develop enough selling pressure, the market may test down to bar 23 or bar 24 high and allow the trapped bears out without a loss.

Yesterday’s Emini setups

SP500 Emini 5 Min Chart Bear Trend From The Open and Bear Channel

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 formed a 6-bar bear micro channel following the wedge top at the November high.
  • The bulls will see the selloff as a pullback, however, because the bear micro channel, the odds favor a 2nd leg down.
  • Bulls will probably wait to see the trendline break before they will be interested in buying for a reversal up.
  • The market is finding support at the November 6th high, which is why today’s rally was successful.
  • Overall, the market may rally for a day or two, however, the upside is probably limited, and the bears will likely get a second leg down.

Summary of today’s S&P Emini price action

SP500 Emini 5 Min Chart Higher Low Double Bottom Then Trading Range

Al created the SP500 Emini charts.

End of day video review

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.

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