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Emini Bears Giving Up at Daily Moving Average

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Trading Update: Friday October 4, 2024

S&P Emini market analysis

Emini daily chart

  • The Emini formed a second consecutive bull doji bar, touching the moving average on the daily chart. The bears are not doing enough and may give up on the idea of a bear breakout below the moving average.
  • The moving average is a strong support level, and the bears are trying to break below it. If the bears cannot do so, the market will reverse up and attempt to test the September All time high.
  • The market rallied during the Globex session and will gap up on the open. This means that the daily chart is getting a bull breakout of the bull flag.
  • The bears will now hope that the daily chart will form a double top with the September 26th high. Next, they will want a breakout below the October 2nd neckline and a measured move down to the 5,620 area.

Emini 5-minute chart and what to expect today

  • The Globex market rallied during the 8:30 AM EDT report bar, which caused the open of the U.S. Session to Gap up.
  • The bulls hope the gap will lead to a second leg up, and the market will test above the 9:05 AM Globex high.  
  • The bears want an endless pullback from the gap up.
  • Because of the gap up, the odds favor a trading range on the open.
  • The first four bars of the day have been sideways. This increases the odds of today having a lot of trading range price action.
  • Most traders should wait at least 6-12 bars before placing a trade. This is because the market usually forms a trading range on the open. Waiting allows a trader to gain clarity on the day type and reduces the risk of getting trapped by an opening reversal, which is frequent during the first hour.
  • Today is Friday, so weekly support and resistance are important.
  • There is an increased risk of a surprise breakout late in the day as institutions decide to close the weekly chart.
  • The selloff on bar 5-6 reduces the odds of a bull trend day and increases the odds of the bears getting a second leg down, which they did on bar 9.
  • Bar 9 is a parabolic wedge bottom; however, a minor reversal is more likely. Parabolic wedges should be thought of as continuation patterns because they are minor reversals that usually resume the trend.
  • While the bears have done a great job with the selling, they are allowing to much buying pressure, bar 15. This increases the odds of a trading range and not a bear trend day.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Buy Climax and Then Trading Range Day

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

SP500 Emini 5-Min Chart Wedge Bottom Then Bull Channel

Al created the SP500 Emini charts.

End of day video review

Periodic end of day review videos will be moved to top of page when done.

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.

  • Why is bar 1 not a buy on 10/3? When I look at 7/2 I see a similar looking bar 1 that was a buy

    • I kind of use the Globex action before the opening bar Garrett if I’m going to trade above or below the first bar. Its very rare that I do. Maybe one day every 2 months. I have to see something screaming obvious to me like an absolutely clear wedge before the open. I do see some semblance of a parabolic wedge down in the hour before the open, bars 1-3 was a weak continuation down, then you had bar 5 which was a clear failed BO below the wedge for a move higher. At least that’s how I interpreted in a real time. Save bar 1 trades for rare citcumstances. Its best to get a good feel for the market first as Brad puts in his discussion each day.

      • I understand what you’re saying. I’m just trying to understand Al’s criteria for marking bar 1 trades. I thought I understood but this and the bar 1 sell on Wednesday are confusing me

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