Emini Bears Want Inside Bar

Trading Update: Monday July 15, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Bulls formed a second leg up last Friday following Thursday’s bear bar. The Bears are hopeful that today will form an inside bar closing on its low. This would create a second entry short.
• The Bulls formed a climactic exhaustive breakout late in a bull trend last Wednesday. The odds favored profit-taking and bad follow-through, so last Thursday (July 11^th) was a bear bar.
• It is common for exhaustion bars to get a brief second leg up, as last Friday did. Sometimes, that second leg can be one bar.
• Last Friday had a tail above the bar and the day close below the midpoint. This increases the odds of sellers above and the bulls getting disappointed on any rally.
• The bears want today to reverse below yesterday’s low and form a bear inside the bar. This would create an implied second leg down.
• The rally-up that began in July is climactic and late in a bull trend. This increases the odds of a reversal down and test of the 5,500 and July low.
• If the bears will get the reversal down, they must add to the selling pressure and continue making the market go sideways.
• So far, the bears have done a good job with the past two days. However, they need to do more.
• Overall, the market will probably continue going sideways and returning to the moving average.

Emini 5-minute chart and what to expect today

• Emini is up 20 points in the overnight Globex session.
• The Globex market has drifted sideways to up in a tight bull channel (15-minute chart) since Sunday’s open.
• The Bulls are hopeful they can undo last Friday’s strong selloff into the close. However, they are likely to be disappointed on the open.
• The past 8 bars on the 15-minute chart have had a lot of overlap. This increases the odds of sideways trading on the open.
• There is an 80% chance of a trading range open and only a 20% chance of a trend from the open up or day
• This means that traders should expect sideways trading on the open and consider waiting for 6-12  bars unless they can make quick decisions.
• Most traders should consider waiting for the opening swing trade to develop, which often begins before the end of the second hour. It is common for the opening swing to start after forming a double top/bottom or a wedge top/bottom.
• Because last Friday had a strong selloff, the upside is likely limited, and the bulls will likely be disappointed by any rally.

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.

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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