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Emini Buyers below Wednesday’s Low

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Trading Update: Friday August 23, 2024

S&P Emini market analysis

Emini daily chart

  • The Emini sold off yesterday, creating an outside down day that ended the 13-bar bull microchannel streak on the daily chart.
  • The Bears are hopeful that yesterday’s outside bar is strong enough to get a 2nd leg down. 
  • While the bears may get a 2nd leg down, the odds favor a 2nd leg up after the bull microchannel. This means there are likely buyers below Wednesday’s low, which is the break of the bull microchannel.
  • Yesterday tested the 5,600 round number which is also a logical magnet to find buyers.

Emini 5-minute chart and what to expect today

  • The bulls formed a gapped up on the open. This increased the odds of the bulls getting a second leg up, which is why the market broke to the upside during bar 7.
  • The bulls formed a 5-bar bull microchannel up to bar 9, which is good for the bulls. However, the overall context is bad for the bulls. As of bar 9, the market is near yesterday’s high. This means that traders buying the close of bar 9 are buying high in an overall trading range, which lowers the probability for the bulls.
  • Because the rally up to bar 9 is strong, the odds favored buyers below, which is why bar 10 formed a deep pullback.
  • The bears have a reasonable second entry short with bar 13. The bears are hopeful it is a parabolic wedge that will lead to a test down the open of the day.
  • The Bulls have allowed too much selling pressure during bars 9-14. This increases the odds that the rally up to bar 9 is a bull leg in what will become a trading range and a test back down to the open of the day.
  • Because the market formed a Tight trading range on the open lasting 6 bars, there is an increased risk that the market will test back to it.
  • Bar 16 is a strong enough breakout that the odds favor a test of the open of the day and a second leg down.

Yesterday’s Emini setups

SP500 Emini 5-Minute Chart Bear Trend From Open

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

SP500 Emini 5-Minute Chart Buy Climax, Double Top, Then Trading Range

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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