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Emini Important Magnets below at 4,749

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Trading Update: Wednesday January 3, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini has important magnets below at 4,749. They are the Moving Average and the December 20th Close. This increases the risk of a sell vacuum test of this price level.
  • Yesterday gapped down and sold off to 4,765 before reversing up and closing above the open.
  • While yesterday was a breakout pullback buy signal bar (High 1), there are probably more sellers above the bar than buyers.
  • Today has the potential to gap down and reach the December 20th close (4,749.75) and the moving average (4,749 area) today.  This means that 4,749 is an important price level, and traders should pay attention to it.
  • With the market being 40 bars away from the moving average, traders do not want to buy just above the moving average, especially when traders are expecting the market to fall below it.
  • Since this is a daily chart, the market can easily fall 20-40 points below the moving average before traders will buy for a scalp.
  • Traders will pay close attention to see if the bears can get a strong close below the moving average, similar to the EURUSD chart below.
  • If the bears can get two to three strong closes below the moving average, the odds of lower prices increase.

Emini 5-minute chart and what to expect today

  • Emini is down 22 points in the overnight Globex session.
  • The Globex market is currently below yesterday’s high.
  • The Bears are probably going to get another gap-down day today.
  • Traders should expect the bears to get a second leg down on the open. Gaps are breakouts; breakouts typically get second legs, even if the second leg is brief.
  • As always, traders should consider waiting for 6-12 bars before placing a trade unless they are comfortable using wide stops and making quick decisions.
  • Most traders should try to catch the opening swing that often begins before the end of the second hour after forming a double top/bottom or a wedge top/bottom.
  • Traders should pay attention to the 4,749 price level, which is the December 20th close, and the moving average on the daily chart. These are both obvious magnets, and there is an added risk of a sell vacuum test of this price level.  

Emini intraday market update

  • The Emini gapped down and sold off to the daily chart moving average and the December 20th close at 4,749.
  • The market formed a wedge bottom and a strong reversal up on bar 18.
  • The rally up to bar 21 was strong enough for a second leg, however it was in the middle of a trading range. This increased the probability of a deep pullback which is what happened on bar 34.
  • Bar 16 was a bad buy signal bar and bar 34 was a retest of the high of bar 16.
  • The bulls ended up getting a second leg up and a test up to the open of the day.
  • As of bar 43, the market is at the high of the day and will probably continue to go sideways for the rest of the day.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart LL DB Wedge Top Trading Range Day

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

EURUSD Daily: Nested Wedge Tops

Brad created the EURUSD chart.

  • The EURUSD formed a strong bear close yesterday below the 20-period moving average.
  • The bears are hopeful that today will become a strong follow-through bar, increasing the odds of lower prices. The bears will likely be disappointed by today’s follow-through bar, and it will be either a bull trend bar or a bear doji bar.
  • The market is around the midpoint of the December rally. Some bulls will buy here, trying to form another higher low in the bull trend that began back in October.
  • While yesterday’s bear breakout bar is enough to make the market Always In Short, some traders will assume that the bears need one more bar to make it Always In Short.
  • Broad bull channels often have pullbacks that become Always In Short. The bulls are hopeful that this is one of those pullback that will lead to higher prices.
  • Because of the nested wedge tops (see chart), the odds favor the bears getting a second leg down.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Bull Trap Then Trading Range

Al created the SP500 Emini charts.

End of day video review

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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