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Emini Test of December 13th Low Likely

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Trading Update: Monday December 18, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed another disappointment bar, following last Wednesday’s strong bull breakout. The odds favor a test of the December 13th low.
  • Last Wednesday was a climactic breakout, late in a trend. This increases the odds that the market will reach the moving average (blue line) soon.
  • The market has been away from the moving average for 30 bars. This is a sign of strong buying that is becoming climactic.
  • Eventually, traders will be unwilling to buy this far from the moving average, and they will see any price above the moving average as overbought.
  • The moving average reflects the fair price, and most of the time traders want to buy at the fair price (moving average) and not far above or below it.
  • Because the bulls have formed such a strong rally from the October low, the odds are against the bears forming a strong bear breakout on the daily chart.
  • The bears need to first halt the buying pressure. Next, the bears need to start collecting strong bear bars. After they can achieve this, they will have a chance at getting a strong downside breakout. However, until there is a breakout, there is no breakout.
  • Overall, the odds favor sideways trading and a test of the December 13th low.

Emini 5-minute chart and what to expect today

  • Emini is up 11 points in the overnight Globex session.
  • The Emini will probably have another trading range day and further disappoint the bulls after last Wednesday’s strong bull breakout.
  • As always, traders should expect sideways trading on the open and consider not trading for the first 6-12 bars, unless they are comfortable making quick decisions and trading with limited orders.
  • There is an 80% chance of a trading range open and only a 25% chance of a trend from the open.
  • Most trades should try 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.
  • Traders should be open to anything and not be in denial of the price action in front of them.
  • Because the market gapped up, it will probably try and test last Friday’s close at some point during the first hour or two of the session.
  • The most important thing on the open is to be patient and not in a rush. There are 81 bars to the day, which is plenty of time to find 2-3 reasonable trades.

Friday’s Emini setups

SP500 Emini 5 Min Chart Trading Range Day

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 formed a strong bear breakout bar last Friday and is trying to rally today.
  • Any rally the bulls get today will form a High 1 buy signal bar, probably with sellers above.
  • A high 1 is a retest of the prior extreme (December 14th). Since the bulls are likely disappointed who bought the December 14th close, some will use any bounce to exit long. This is why it is common for High 1 buy setups to often lead to deeper pullbacks.
  • While last week’s bull breakout is strong enough for a second leg up, the market will probably have a deeper pullback first.
  • The bears hope that Last Friday’s selloff is strong enough to form a double top, and a neckline test at the December low. Next, the bears will want a measured move down of the December range and a test of the October low.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Small Pullback Bull Trend From The Open

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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