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Emini Risk Getting Big for Bulls

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Trading Update: Friday January 26, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed an inside bar yesterday, following Wednesday’s bear reversal bar. The risk is getting big for the bulls, and the theoretical swing stop for the bulls is below the January 17th low.
  • This increases the risk of the bulls taking profits to reduce their risk, leading to a minor pullback.
  • Inside bars are triangles on smaller time frames, meaning they are magnets for the market to retest once the price breaks out from the inside bar range.
  • If the market breaks above yesterday’s high, there is an increased risk of the market retesting yesterday’s high within a bar or two.
  • The bears are hopeful that the market will fail to break out above yesterday’s inside bar and the bears will get a reversal down.
  • Because the daily chart is in a bull micro channel, there is an increased risk of any downside breakout leading to a minor reversal.
  • The risk is getting big for the bulls and the theoretical swing stop for the bulls is below the January 17th low. This increases the risk of the bulls taking profits to reduce their risk, leading to a minor pullback.
  • Overall, the bears do not have enough to get a major reversal down, which means the best they can expect is a minor reversal until they develop more selling pressure.

Emini 5-minute chart and what to expect today

  • Emini is down 7 points in the overnight Globex session.
  • The Globex market on the 15-minute chart has been in a bull channel for most of the early morning hours and recently tested yesterday’s high.
  • At the moment, the market will likely open with little to no gap at the start of the U.S. Session.
  • As always, most traders should consider not trading during the first 6-12 bars unless they can make quick decisions and trade with limit orders.
  • Most traders should wait for the opening swing to develop, which 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 yesterday’s high as well as the open of the day. Both are likely to be magnets.
  • Today is Friday, which is the final trading day of the week. This means traders will pay close attention to the weekly chart support and resistance. The bulls want the weekly chart to close on its high, and the bears will try their best to create a tail above the bar, which is most likely.
  • Lastly, traders should be mindful of a potential surprise breakout late in the day as institutions fight over the close of the weekly chart.  

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Lower Low Double Top Then Wedge Bottom

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 broke below the January 23rd low and found buyers below its low.
  • The bulls are attempting to get a bull reversal bar and another wedge bottom attempt.
  • At the moment, the odds favor a rally and a test of the January 24th high.
  • The bears keep attempting to get down to the December low. However, the buyers are continuing to buy ever new lower in the current channel.
  • This increases the odds of the channel evolving into a trading range and the market getting a rally lasting a couple of legs. The bulls are hopeful that they will be able to form a strong upside breakout above the EMA and a test to the January high.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Wedge Bottom Then Parabolic Wedge Top

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.

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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