Emini Buyers below Moving Average Likely

Trading Update: Monday July 22, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini on the daily chart has formed three consecutive bear bars closing below their midpoints. While the bears have done a great job, the odds are there will be buyers below the moving average and that the market will likely pullback for a couple of legs sideways to up.
• This is a strong enough downside breakout to increase the odds of a second leg down.
• While the bears have done a good job with the consecutive bear bars, last Friday’s bear breakout bars were the first bar closing below the moving average in over a month. This increases the odds of a bounce today or tomorrow.
• The daily chart is also in a tight bull channel, and the recent three-day selloff Is a trendline breakout. This increases the odds of the bears needing a credible major trend reversal setup before they get a second leg down.
• Bears will likely look to sell a pullback, betting on a lower high.
• Overall, the Bears have done a good job with the overall selling pressure, and the odds favor a second leg down. Because the risk/reward is bad for the bears, the market may get a deep pullback before the bears get their 2^nd leg down.

Emini 5-minute chart and what to expect today

• The Emini formed a tight bull channel on the 15 minutes for most of the overnight Globex session.
• The opening of the day formed a two-legged buy climax late in a rally (15-minute Globex chart).
• The increased odds of the rally up to bar 4, getting a reversal down to the low of the day.
• The bears formed a downside breakout down to bar 8, which was strong enough for a second leg down. However, the bears failed to get the second leg, and the market rallied up to the bar 4 high. This was due to the selloff to bar 8 being a trendline break of the bull trend (15 minutes) on the Globex chart.
• As of bar 17, the market has formed a big up, big down situation. This typically leads to a trading range and sideways trading.
• The bears are hopeful that the bulls who bought the rally up to bar 4 are disappointed enough that they will not be willing to buy the retest of bar 4 during bar 15.
• Next, the bears want a double top with bar 4 high and a break below the neckline of bar 8 low, followed by a measured move down.
• The bulls are hopeful that the rally up to bar 15 is strong enough for a second leg up and a breakout above the bar 4 high.

Friday’s Emini setups

Al created the SP500 Emini charts.

Here are reasonable stop entry setups from Friday. 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 two consecutive bear bars, closing below the June high.
• While the bulls have done a good jut with the rally up to the July high, it is still within an overall trading range.
• The recent rally is climactic, and the risk is getting big for the bulls. This increases the odds of a pullback over the next couple of days.
• The rally up is strong enough for a second leg up, which increases the odds of buyers below. However, the pullback may be deeper than what the bulls want and last a couple of legs.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

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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