Trading Update: Monday January 29, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed a failed breakout above last Thursday’s high one buy signal bar. This increases the odds of more sideways trading over the next few days.
- The late January bull breakout has almost gone a measured more up of the monthly long December trading range.
- The risk for the bulls is getting big, increasing the odds of profit-taking soon. This increases the odds of a pullback as both bulls and bears begin to sell.
- While the odds favor a pullback on the daily chart, it is more likely that a pullback will lead to a minor reversal rather than a major reversal.
- The bears need a larger trendline break of the January rally and a retest of the highs before they have a chance at a major reversal.
- The bears hope that the December trading range will act as a magnet for the market, leading to a final flag reversal.
- Overall, traders should assume that the market will begin to go sideways on the daily chart as bulls take partial profits.
Emini 5-minute chart and what to expect today
- Emini is up 3 points in the overnight Globex session.
- The Globex market has gone mostly sideways during the overnight session.
- As always, traders should expect the open to have a lot of trading range price action and continue to go mostly sideways.
- Most traders should consider not trading for the first 6-12 bars unless they can trade with limit orders and make quick decisions.
- Traders should consider trying to catch the opening swing that often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
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.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD continues to hold below the moving average, forming a tight bear channel.
- The selloff alternates bull and bear bars, warning that the selloff may form a bear leg in what will become a trading range.
- The bears have a negative gap with the January 5th low and January 24th high. This increases the risk of the gap leading to a measured move down.
- The bears are still hopeful that they will get the downside breakout and test of the December low.
- At the moment, the bulls have not done enough to stop the selling pressure. This increases the risk of lower prices unless the bulls can halt the selling and begin to get more closes above the moving average.
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.
