Trading Update: Tuesday September 3, 2024
End of day video review
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S&P Emini market analysis
Emini daily chart
- The Emini formed a bull outside the bar last Friday, closing on its high. While this is a good bar for the bulls, the context is bad due to the prolonged tight trading range.
- Outside bars are expanding triangles on smaller time frames. The bears are hopeful that the outside up bar will lead to a reversal down.
- The channel up from the August 5th low is tight which means that the odds favor higher prices.
- The bears have done a good job with the sideways trading over the past two weeks to make the probability close to 50% for both the bulls and the bears.
- Before the bears can get a chance at a reversal down, they must first halt the buying, which is what they are accomplishing right now on the daily chart.
Emini 5-minute chart and what to expect today
- The Emini gapped down around 40 points on the open of the U.S. Session.
- The bears have formed a bear micro channel with the first 10 bars of the day.
- At the moment, the odds favor a bear trend or a trading range day.
- A 10-bar microchannel is climactic behavior and increases the odds of sideways trading soon.
- The bulls were able to form bull bars during the 10-bar bear microchannel. This is a sign that something is not right with the bear selloff and increases the risk of a reversal or deep pullback.
- The bulls are hopeful that the selloff down to bar 10 is a sell vacuum test of the bottom of a larger trading range and a test of 5,600 round number.
Friday’s Emini setups
Al created the SP500 Emini charts.
Here are reasonable stop entry setups from Friday (before Labor Day 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.
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.
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.
Thank you, learned something new today.
Thanks all commentators in the room today. I particularly enjoyed the pragmatic view of TimS, great work describing number of major setups that the chart can evolve to as it evolved and staying unbiased.
I felt the other commentators weighted heavily on the idea that bulls are going to turn the tide, not wise to be short too long, weighting on the idea from bar 10 that never realised :o) Such is the effect of the tight bull channel, that lasted so long, that it has swayed even the greatest minds.
10% of days are strong trends from the open meaning
90% of days have 2 types of PA. Our job is to understand where the transition occurs. The transition often occurs in the first part of the day or in the last part of the day. Anything is possible. It’s the probabilities that matter.