Emini Final Trading Day of the Year

Trading Update: Friday December 29, 2023

S&P Emini pre-open market analysis

Emini daily chart

• Today is the final trading day of the year.
• The is beginning to stall above the December 20^th high and will probably begin to pull back over the next couple of days.
• The bulls see the March 2022, the high of last year, only 30 points away from the current price level. This magnet is close enough that the market will probably have to reach it soon.
• The problem the bulls face is that the rally that began in November is climactic and has been away from the moving average for 38 bars. This increases the probability that the market will have to pull back soon.
• The market may have to test the moving average before it reaches the March 2022 high.
• The December 20^th outside down bar was a surprise breakout and will likely let a second leg down. This means that bears may see the current rally above the December 20^th high as a pullback from the selloff.
• And the reversal down that we get could be quick. Just like what happened on December 20^th, if traders conclude that the market is overbought, more and more bulls will begin to sell out of longs, and bears will sell to go short.
• The past several bars have been 20 – 30 points in range. Therefore, some bulls may exit longs if the market goes 20-30 points below any bar, just in case the market sells off quickly. Other bulls may wait for a strong bear close to exit.
• As climactic as the rally is, the best the bears can expect is a trading range on the daily chart. This means there are probably buyers near the moving average willing to scale in lower.

Emini 5-minute chart and what to expect today

• Emini is down 4 points in the overnight Globex session.
• Because the daily chart is overbought, today has the potential to be a bear trend from the open.
• Traders should pay close attention to the week’s open (4,808.75). This week will be the ninth consecutive bull close on the weekly chart which is climactic behavior.
• It is worth mentioning that the week’s low is only three ticks below the week’s open. Most weekly chart bars have tails that are bigger than three ticks. This increases the risk of the market going below the open and low of the week.
• As I often say, traders should expect the open to have a lot of trading range price action. This means most traders should wait for the market to go sideways for the first 6-12 bars before placing a trade.
• Most traders should try to catch the opening swing that often begins before the end of the second hour after forming a double top/bottom or a wedge top/bottom.
• Today is the final day of the week, month, quarter, and year. This means that traders must be ready for anything. Traders must not beg in denial of the chart in front of them.
• Lastly, traders must be ready for anything, as today has the potential to have a surprise breakout.
• While the final day of the year can be a small range day, traders must be prepared for a possible surprise breakout late in the day, similar to what formed last year (see chart below).

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 formed a bear reversal bar after the December 27^th climactic rally.
• The bulls have a high 1 buy signal bar on December 26^th, which is a magnet for the bears.
• The December 26^th High 1 buy signal bar is also an inside bar, which is a triangle on a smaller time frame. Triangles have a magnet pull back to their midpoints, another reason the market is getting a pullback.
• The next target for the bears is the November 29^th high, which the market will probably reach in the next couple of days.
• The bears want a strong entry bar following yesterday’s bear reversal bar. This would increase the odds of lower prices and a second leg down.
• With the magnet of 1.1000 just below, the market may have to test down to it. Round numbers are magnets, and the market will often test them several times.
• Overall, traders will pay close attention to the kind of entry bar the bears can get following yesterday’s strong reversal bar. It is reasonable for bulls to step aside for a couple of bars and wait.

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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