Trading Update: Friday August 30, 2024
End of day video review
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S&P Emini market analysis
Emini daily chart
- The Emini has spent a lot of time going sideways this week in a tight trading range. This is due to the bulls trying to prevent the week from forming a bear bar and closing below its open.
- The August rally is strong enough for higher prices, and the bears are trying to increase the selling pressure to bring the probabilities closer to neutral for both the bulls and bears.
- While the bears have done a good job of making the market go sideways for several days.
- However, they need to do more if they are going to get a strong reversal down. At the moment, the best the bears can expect is a trading range.
Emini 5-minute chart and what to expect today
- The Emini opened with a tight trading range that has gone on for more than 15 bars. This increases the odds that today will have a lot of trading range price action for the rest of the day.
- The opening range is small; therefore, the odds favor a measured move up or down its range sometime today.
- The bears are getting a downside breakout on bar 18. At the moment, bar 18 is strong enough for a second leg down and a measured move down of the opening range.
- While bar 18 is strong for the bears, it is a big bar in the middle of the trading range (High of today and low of yesterday). This increases the risk of bad follow-through on bar 19 and a deep pullback. The bulls want bar 18 to become a bear trap. However, it is strong enough that the odds favor a second leg down.
- Today is the final day
- Bars 17-18 are strong enough for a second leg down. However, bar 19 is a warning that something is wrong with the bear case. It is a reminder that any selloff we get will probably lead to a bear leg in what will become a trading range. Bears should not have allowed bar 19 to form. The bulls are probably better off waiting to see a second leg down after 18-19.
- Today is also the final day of the month, which increases the risk of a surprise later in the day as traders decide on the close of the weekly and monthly charts.
- Today is Friday, so the weekly chart is important. The midpoint of the week, 5,623.25, is a logical magnet for the market to test. Traders monitor this price level, as it will likely be tested sometime today.
- The bears are getting their second leg down with bar 22; however, as I mentioned earlier, bar 19 is a problem, and it increases the risk of bulls scaling in lower below bar 19. This means that the market may test back up to the bar 19 high later today.
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.
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.
