Emini Strong Follow-Through Buying

Trading Update: Friday September 13, 2024

S&P Emini market analysis

Emini daily chart

• The Emini formed a follow-through bar after Wednesday’s strong outside-up bar.
• This is a strong enough reversal up that the odds favor a second leg up.
• I mentioned that the September 6^th low was a dangerous area for bears to establish short positions, even though the odds favored a second leg down.
• This is because the August rally is strong enough for a second leg up, which means that bulls would see the September selloff as a pullback from the August rally.
• The bulls are hopeful that they are going to be able to trap the bears and lead to a strong upside breakout above the 5,700 round number.
• More likely, the daily chart is in a trading range and the market will find sellers on the test of the 5,700 round number.
• The daily chart might be forming a contracting trading range, which is known as a triangle.
• At the moment, the reversal up from the September 6^th low is strong enough that the bulls will likely get a second leg up. The risk for the bulls is they are now buying high in a trading range on the daily chart.

Emini 5-minute chart and what to expect today

• The Globex market has been in a tight trading range for most of the overnight session (15-minute chart).
• At the time of writing this,  the market is going to open with a small gap up on the open.
• As always, traders should expect a trading range to be open and for the market to have a lot of sideways trading.
• This means that traders should be patient and consider not trading for the first 6-12 bars.
• Most traders should try to catch the opening swing that often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
• Today is Friday, so weekly support and resistance are important. The bulls want the week to close on its high, and the bears want today to create a tail.
• Fridays have the potential to get surprises late in the day as traders decide on the close of the weekly chart. This means that a trader must not be in denial if a strong breakout up or down happens late in the day.
• Today, there is an increased risk of creating disappointment on the daily chart for the bulls following the most recent consecutive bull bars. This means that traders should pay attention to the open of the day as today may try and close below it.

Emini Intra-Day Update

• The Emini rallied from bar 1 to bar 13. However, the odds favored a trading range and not a trend from the open. This is why the market reversed down on bar 12.
• Bar 12 is a strong enough bar that the bears have a chance at getting an early high or the day or at least a high for the next couple of hours.
• The odds favor a test of the bar 1 low and price to fall below it.
• Bar 13 was a bad entry bar for the bears selling bar 12. However, bar 12 is a big enough surprise bar that the odds favor sellers above it.
• The bulls are allowing the bears to make money above bars, which increases the odds of the market forming a trading range and not a bull trend. This means that the bears will probably get a couple of legs sideways to down.
• This means that the rally to bar 15 might be a bull trap and lead to a reversal down.

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.

Summary of today’s S&P Emini price action

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.

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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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