Trading Update: Tuesday July 16, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed a doji bar yesterday with a small bull body. Yesterday’s failed to break out above last Friday’s high and reversed down.
- The bears are doing a good job of halting the buying pressure and making the market go sideways.
- However, the bears only have one bear bar out of the past ten trading days. This is a sign of bullish strength and increases the odds of more sideways trading.
- The odds favor a test of the moving average and every bar that gets added to the sideways trading is dragging the moving average up to the current price.
- The market can reach the moving average by going lower or sideways, which is what it is doing right now.
- The Emini is climactic on the daily chart, as well as the higher time frames. This increases the odds of sideways to down over the next several months.
- The rally up in July is strong with several micro gaps. Strong rallies late in a bull channel is a buy climax that usually leads to exhaustion.
- This means that the expectation is a test of the bottom of the buy climax, the July low. However, it could take several weeks to get down to the July low.
- It is important to realize that selling below bars is unlikely at the moment. Even though the odds favor sideways to down, the bears still need to develop more selling pressure.
- Overall, the upside is probably limited for the next several weeks, and the market will probably go sideways down. The bears need to continue to develop more selling pressure.
Emini 5-minute chart and what to expect today
- The Globex market sold off during the early morning hours and rallied back to nearly the 5,700 round number, where it will likely find resistance.
- At the time of writing this, the market is up 13 points (15 minutes before the U.S. Open).
- As always, traders should expect the open to have a lot of trading range price action. This means that most traders should wait for 6-12 bars before placing a trade unless they are able to make a quick decision.
- The market is going to open near the 5,700 round number, which has been an important magnet for the past couple of trading days.
- Because the daily chart is getting climactic at the 5,700 round number, today will probably disappoint the Bulls. This means that today has the potential to become a bear trend day or at least close below the open.
- The market may try to test yesterday’s high, and if it does, it will likely find sellers above it.
- Because the bears want the market to close below the open of the day, traders should pay attention to it. If the market rallies on the open for a couple of legs and it looks like a bull leg in what will become a trading range, traders will expect a reversal back down to the open.
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 EURUDS is continuing to add more bull bars to the rally that began in late June.
- The problem the bulls have is that the daily chart is at the trading range (June high).
- However, the bulls are doing a good job creating a series of bull bars in a tight bull channel.
- The trading range on the daily chart, which has lasted for several months, is contracting. On the higher time frames, this is a triangle, which increases the odds that the market is in breakout mode.
- Traders who want a higher probability will wait for the bulls to get a stronger upside breakout.
- While the rally up is good for the bulls, it is still a possible bull leg in what will become a trading range. This means there is an added risk of a deep pullback and a possible 50% pullback over the next several weeks.
- There are trapped bears who sold during the July rally and scaled in higher. Since the market is in a trading range, they will probably be able to avoid a loss.
- If the rally continues to increase in strength, without pulling back, those bears will eventually be forced to buy back their shorts. This would add to the buying pressure and lead to higher prices.
- The bears hope that the rally will form a double top with the June high, leading to a break below the neckline (June low) and a measured move down. This is not likely at the moment, but it is certainly possible.
- Overall, the daily chart will probably begin to go sideways soon and pull back. Traders can consider waiting to see what the pullback looks like or wait for a stronger upside breakout.
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.
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.
