Emini Sideways into FOMC Release

Trading Update: Wednesday January 31, 2024

S&P Emini pre-open market analysis

Emini daily chart

• Today is an FOMC day and the final day of the month. This increases the risk of a surprise breakout later in the day.
• As I have mentioned, the risk is getting big for the bulls, which means those bulls must find a way to reduce their risk. The easy way to do this is to reduce their position.
• This increases the odds of a pullback and a test closer to the moving average.
• The bears hope to take control and form a strong downside breakout. However, the odds are against this. Any selloff they get will likely lead to a minor reversal and sideways trading.

Emini 5-minute chart and what to expect today

• Emini is down 27 points in the overnight Globex session.
• The Globex market has gone sideways for several hours and is likely trying to form a bottom.
• The open of the U.S. Session will likely have a lot of trading range price action for the first 1-2 hours.
• Today is an FOMC day, meaning traders should be prepared for many trading range price action leading up to the report at 2:00 PM EST.
• Traders should be flat at least 30 minutes going into the report and wait for at least 10 minutes after the report before placing a trade.
• As I often say, traders should consider not trading for the first 6-12 bars unless they can make quick decisions and are comfortable trading with limit orders.
• Most traders should try to catch the opening swing, which often lasts for at least two legs and hours. This provides great risk-reward for traders, so they should focus on catching the opening swing.
• It is common for the opening swing to begin before the end of the second hour, after forming a double top/bottom or a wedge top/bottom.
• Lastly, traders must remember to trade small during the FOMC report. In general, traders should consider trading 20% of their normal position size.  

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 reversing up to the moving average after forming an outside up bar on the day.
• The bulls see the reversal as a wedge bottom and hope they can get today to form a strong bull bar closing on its high. Next, the bulls want strong follow-through buying and a close above the moving average.
• The bulls have been making money below bars, which increases the odds that the bear channel will evolve into a trading range soon.
• At the moment, the odds favor a couple of legs sideways to up. However, if the bulls are going to get a strong reversal up, they need to get close above the moving average.

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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