Emini at Important Support

Trading Update: Friday July 19, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini reached the moving average and the 5,600 round number yesterday which are two important support levels on the daily chart.
• The market has been away from the moving average for about 30 bars, which is climactic.
• While the bears have done a great job getting the market down to the moving average and forming consecutive bear bars, the odds favor a trading range more than the strong of a strong bear selloff.
• This means that bears are selling yesterday’s close risk, selling into support, and sitting through a deep pullback.
• The breakout over the past two days is strong enough for a second leg down.
• The bears are hopeful that the recent selloff is the start of a reversal down to the June low and that the year’s high is in place.
• The odds are against the market going straight down to the June low. This means that the bears will probably have to create a series of lower highs in a tight trading range before they can get a clear downside breakout.
• Overall, the Bears have done a good job getting to the moving average. Next, they need to get strong closes below the moving average as a sign of increased strength.

Emini 5-minute chart and what to expect today

• The Globex market sold off to the bottom of yesterday’s range and has gone sideways to up on the 15-minute chart.
• The Bulls will see a double bottom with yesterday’s low and the low of today’s Globex session. Next, the bulls want a breakout above the neckline (yesterday’s 1:30 PM EST) and a measured move up of the double bottom.
• Because the daily chart is at support, bulls want an upside breakout today and a strong reversal up.
• As always, traders should expect a trading range open for the market to go sideways.
• In general, most days, there is an 80% chance of forming a trading range open and only 20% of a bull trend from the open. This means that traders should not be in a rush to place a trade.
• Most traders will be better off waiting for 6-12 bars before placing a trade.
• Today is Friday, so the weekly chart is important. This means that traders must be prepared for a possible surprise breakout late in the day as traders decide on the close of the weekly chart.
• Overall, the odds favor a bounce today because the daily chart is at important support.

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 is forming a parabolic wedge top (July 9^th, July 15^th, and July 17^th) and a possible failed breakout of the June high.
• Parabolic wedges are always breakouts on higher time frames. This means that the odds are it is a minor reversal that will lead to a second leg up.
• Because yesterday is a strong bear reversal bar for the parabolic wedge, it is reasonable for bulls to exit below and see what the pullback looks like.
• The bears need to get a strong entry bar to increase the risk of a second leg down.
• Overall, the bulls have done a good job with the July rally. However, the rally is within a trading range, which increases the risk that it fails and reverses back down.
• Traders must be prepared for a possible downside breakout of a bull flag and a test of the bottom of the range. At the moment, the best the bears can likely get is a 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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