Trading Update: Monday October 7, 2024
End of day video review
Follow PriceActionRose’s YouTube channel for more Al Brooks price action analysis.
You can also watch Joseph’s EOD Review for today on his YouTube channel.
S&P Emini market analysis
Emini daily chart
- Last Friday formed a doji bar closing in the upper 1/3rd of the tight trading range on the daily chart. This is a weak High 1 buy signal bar, which increases the odds that there are sellers above last Friday’s high, and the bulls will fail to get an upside breakout.
- The daily chart is building the selling pressure, which increases the odds of a possible downside breakout.
- The bears want the market to form a double top with the September high. Next, they want a break below the October 2nd neckline and a measured move down.
- Traders should assume that the tight trading range is going to continue until there is a clear, strong breakout with follow-through.
- Tight trading ranges can last a long time, and it is easy to get trapped while betting on a breakout.
Emini 5-minute chart and what to expect today
- The Emini gapped down on the open and formed a tight trading range with the first three bars of the day.
- The bears are trying to get a downside breakout with bar 5 and a measured move down of the opening range.
- Because the market gapped down, the odds for a second leg are down.
- In general, most traders should not be in a rush on the open and consider waiting for 6-12 bars before placing a trade. This is because failed breakouts on the open are common, and the market often goes sideways in the first hour.
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 has formed a 6-bar bear microchannel that has broken below the moving average.
- This is a strong enough downside breakout that the odds favor a second leg down, even if the market gets a deep pullback first.
- There are probably sellers above yesterday’s high. However, the risk is big for the bears, which increases the odds of a couple of legs going sideways to up.
- Bears will look to sell around the midpoint of the October selloff.
- Because the October 4th selloff was climactic late in a bear selloff, it increases the risk of a pullback lasting a couple of legs. Traders should expect disappointment for at least 1-3 bars and the sideways market.
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.
