Trading Update: Monday September 9, 2024
End of day video review
S&P Emini market analysis
Emini daily chart
- The Emini formed a downside breakout last Friday, closing on its low. This increases the risk of lower prices and the bears getting a second leg down.
- The next target for the bears is the August low. They want a double top with the July high and a break below the neckline (August low), followed by a measured move down.
- Because the risk is getting big for the bears and the market is in the middle of a trading range, the bears may take partial profits, causing the market to pull back.
- Yesterday’s breakout bar is a surprise; surprises typically get second legs.
- Bulls want to prevent the market from falling below the August low. They want to continue to create higher lower and higher highs on the daily chart.
- Overall, the odds favor the bears getting a second leg down, even if the bulls can create a rally lasting a couple of legs.
- The bear breakout to last Friday’s low is strong and the overall context of the daily chart is a trading range. This increases the odds that there are sellers above, scaling in higher.
- Overall, because last Friday’s breakout bar was climactic, the odds that today will disappoint the bears increase. This means that today, there will probably not be a strong bear breakout bar; instead, it will form a doji or a bull bar. A Climactic bar typically leads to a pause in the selling, not a reversal. This means that a pullback is more likely than a reversal.
Emini 5-minute chart and what to expect today
- Emini is up 30 points in the overnight Globex session.
- The Globex market has been in a tight bull channel on the 15-minute chart for most of the overnight session.
- This means that the open will have a lot of trading range price action and not form a trend from the open.
- Traders should expect a trading range open. This means the market will probably form a double top/bottom or a wedge top/bottom during the first two hours.
- A trading range always consists of a variation of one of the above-mentioned patterns.
- The open usually sets up an opening swing before the end of the second hour. This means that a trader can wait for a double top/bottom or a wedge top/bottom before placing a stop entry to try and catch the opening swing.
- The opening swing is important because it can last a few hours and sometimes double range, leading to a great risk/reward.
- There is no rush to do anything on the open. This means that traders should consider not trading the first 6-12 bars unless they can make quick decisions. This is because the open often has several reversals in order to create a trading range open.
Friday’s Emini setups
Al created the SP500 Emini charts.
Here are reasonable stop entry setups from Friday. 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.
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.
“ The Globex market has been in a tight bull channel on the 15-minute chart for most of the overnight session.
This means that the open will have a lot of trading range price action and not form a trend from the open.”
Why is this the case?
thank you sir