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Emini Buyers at the Moving Average

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Trading Update: Thursday January 4, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini reached the daily moving average yesterday after spending over 40 days away from it. This increases the odds of buyers, at least for a small bounce.
  • The December 20th outside down breakout was strong enough to get a second leg down. This is why sellers were likely above its high, and the odds favored a test of the December 20th low.
  • The bears want today to get follow-through selling below the moving average. However, they will probably be disappointed at this price level.
  • Bulls have been unable to buy at the moving average, which reflects the fair price for over 40 bars. This will increase the odds of buyers around yesterday’s close and the bears being unable to get a strong bear follow-through bar.
  • At the moment, the odds favor a bounce lasting a day or two. If the bears can begin to get strong and close below the moving average, the probability will increase for lower prices.

Emini 5-minute chart and what to expect today

  • Emini is down 7points in the overnight Globex session.
  • The market is going to open near yesterday’s close.
  • Traders should expect the opening to have a lot of trading range price action. This means that most traders should consider not trading for the first 6-12 bars, unless they are able to use wide stops and make quick decisions.
  • Most traders should wait for the opening swing trade to develop, which often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
  • The most important thing on the open is to not be in a rush and to be patient.
  • If today is going to be a strong trend day, there will be plenty of time to enter.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Bull Trap Then Trading Range

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 strong bear breakout bar two days ago that closed below the 20-period moving average.
  • The follow-through yesterday was weak, which increased the probability of a bounce today.
  • The selloff over the past week is strong enough for a second leg down. However, because the market is more likely to evolve into a trading range than a bear trend, the pullback could be deep.
  • There are probably sellers above yesterday’s high, scaling in lower. However, if selling above, traders must be prepared for a deeper pullback than what traders want.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Wedge Top Then Tight Bear Channel

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.

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