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Emini Bull Profit Taking Soon

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Trading Update: Friday July 5, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini rallied up from testing the moving average on July 2nd and formed a follow-through bar closing above the all-time high.
  • While this is good for the bulls, the daily chart has had several days of overlapping bars. This increases the risk of the current rally becoming a failed bull breakout of the tight trading range due to profit taking bulls.
  • The daily charts have been in a tight bull channel, with the most recent leg being May 31st.
  • The market has spent 20 days above the moving average, with many of those bars overlapping inside a tight trading range.
  • Since the odds favor a trading range, the market should fall below the moving average. This means traders will be suspicious of the July 2nd rally above the moving average.
  • The market got within 5 points of the moving average on July 2nd and rallied from it. Because the market got so close to it, traders will wonder if the moving average was adequately tested. This means there is an increased risk of a reversal back down to the moving average.
  • While the bulls have done a good job, the odds favor a trading range and not a strong upside breakout.

Emini 5-minute chart and what to expect today

  • The Globex market went sideways for most of the overnight session.
  • The 8:30 AM EST report bar created a large doji bar. This increases the risk of sideways trading on the open.
  • The open will probably have a lot of trading range price action. This means that most traders should use caution and consider waiting for 6-12 bars unless they are able to make quick decisions.
  • Because of the 8:30 AM EST report bar, there are likely buyers below it and sellers above it.
  • Most traders should wait for a clear breakout with follow-through beyond the range of the 8:30 AM EST report bar.
  • The bulls want today to become another follow-through bar after Wednesday’s bull bar. The bears want the opposite and for today to close below the open of the day.

Emini Intra-Day Update

  • Today formed an Expanding triangle open which increases the risk that today will have a lot of trading range price action.
  • Expanding triangle opens are prone to getting big breakouts to the top and bottom of the range that are buy and sell vacuums. This increases the risk of sharp reversals up and down.
  • The bears tested the 8:30 AM EST report bar low, and it failed to break below it on bar 9.
  • The bulls are trying to get a reversal up and test the 8:30 report bar high. The odds favor a breakout above or below the 8:30 report bar. However, it could take several bars before there is a clear breakout.
  • Because today is the day after a holiday, there is an added risk of a lot of trading range price action.
  • The bulls have the potential to get a successful breakout above the 8:30 AM report bar. However, there is an increased risk of any potential breakout above the 8:30 AM report bar becoming disappointed.
  • Traders should continue to pay attention to the open of the day as it will likely be a magnet for most of the day.
  • The rally up from bar 9 is tight, and as of bar 36, the rally is tight enough that the best the bears can expect is a trading range.
  • The bears want to create a reversal down. However, they will need to clearly make the bull trend convert into a trading range first. At a minimum, the bears need to get closes below the moving average. Without it, the odds favor higher prices.
  • If the bears can increase the selling pressure, the next target will be the midpoint of the day. The bears are hopeful they can close the day below the open, but it is not likely due to all of today’s buying pressure.
  • The market broke above the 5,600 round number. This is an important magnet and there will likely be sellers above it. This increases the risk of a reversal down back to the 5.600 round number.

Wednesday’s Emini setups

SP500 Emini 5-Minute Chart Small Pullback Bull Trend and Early Close

Al created the SP500 Emini charts.

Here are reasonable stop entry setups from Wednesday (early close before July 4 holiday). 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 bull follow-through bar on July 4th, following the July 3rd bull breakout.
  • The bulls formed another follow-through bar today. At the moment, the market is Always In Long and likely to go higher and get a second leg up.  
  • While the past three bull bars are strong, the bars have overlap. This increases the risk of a pullback.
  • The Bulls are hopeful that the rally up from the June low will form a successful right shoulder of a head and shoulders bottom. This is the same thing as a higher-low major trend reversal.
  • The bulls need an upside breakout above the June high. Next, they want a measured move-up.
  • The bears want to prevent the bulls from getting an upside breakout above the June high.
  • Overall, the market is Always In Long. However, the market is in a large trading range. This increases the risk of the bulls getting a deep pullback.

Summary of today’s S&P Emini price action

SP500 Emini 5-Minute Chart High 2 Double Bottom Then Small PB Bull Trend Day

Richard created the SP500 Emini chart – Al travelling

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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