Emini Sell Vacuum Test of 5,000

Trading Update: Monday August 5, 2024

End of day video review

S&P Emini pre-open market analysis

Emini daily chart

• The Emini sold off on Friday, creating a follow-through bar for the bears following last Thursday’s (August 1^st) bear reversal bar.
• The Globex market formed a large selloff during the overnight session testing the 5,100-round number. This increases the odds that the market will get a sell vacuum test of the 5,000 round number soon.
• While the market is climactic, the consecutive bear trend bars last Thursday and Friday may prevent bulls from buying.  
• The selloff down last Friday’s low is strong enough that the odds favor lower prices, even if the market has to pull back first.

Emini 5-minute chart and what to expect today

• Emini is gapping down almost 200 points in the overnight Globex session.
• The Globex market sold off to 5,120 during the early morning hours.
• This means that the open will have a gap down of almost 200 points.
• The open of the U.S. Session is formed by consecutive bull trend bars. However, the range is very big. This means that traders must trade small. In general, trade 20% of your normal position size.
• The bulls formed consecutive bull trend bars on the open, which increased the chances of a bull trend forming the open bull trend.
• Because the gap down is large and the market is far from the moving average, the odds favor a rally and a test of the moving average.
• Below is an example of August 24, 2015 when the market gapped down 100 points. Expectation was a test of the moving average which is what I think will happen today.

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.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

• The EURUSD formed a strong upside breakout and today broke above the July high, which was expected.
• The odds favored a 2^nd up after the rally in July, even after the deep pullback down to the August low.  
• Yesterday formed a weak follow-through bar closing below the midpoint of the bar and below the July high. This increases the odds of a reversal down and a failed breakout of the trading range.
• The bears want tomorrow to be a strong reversal bar for the failed breakout above the July high.

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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