Emini Pullback Likely to Disappoint Bears

Trading Update: Thursday January 25, 2024

S&P Emini pre-open market analysis

Emini daily chart

• The Emini gapped up yesterday; however, it sold off, testing the range of the prior two trading days.
• While yesterday’s selloff was good for the bears, it is more likely a pullback in the bull rally. This means that a pullback is more likely than the start of a bear trend.
• The bears see the month-long trading range below as a magnet. They hope the current rally will lead to a final flag and will reverse back into the month-long trading range soon.
• The bulls see the current rally that began last week as strong enough for a second leg up. While the rally is strong, it will probably test the breakout point of the month-long trading range soon.
• Overall, the daily will probably begin to go sideways over the next couple of days as the bears try for a test down to the January 12^th breakout point high.

Emini 5-minute chart and what to expect today

• Emini is up 19 points in the overnight Globex session.
• The Emini recently formed an upside breakout during the 8:45 AM EST report. The bulls will see the breakout as strong enough for a second leg up and hope it will cause a rally during the U.S. Session.
• As strong as the 8:45 AM EST report is, it is more likely a bull leg in what will become a trading range and disappoint the bulls.
• However, the rally is strong enough that the odds for a second leg up are high, which means the downside is probably limited on the open.
• As always, traders should be cautious on the open and consider waiting for 6 – 12 bars before placing a trade.

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 continuing to go sideways below the moving average.
• The Bulls tried to get a reversal up yesterday. However, they were unable to get a strong close and the bar close below its midpoint.
• The bears are hopeful they will be able to take control of the market, but there will probably be buyers not far below yesterday’s low.
• Traders should expect the market to go sideways over the next several days.
• The bears have a negative gap with the January 5^th low and January 24^th high. This increases the risk of lower prices and a test down to the December low.

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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