Trading Update: Thursday September 5, 2024
End of day video review
Follow Joseph’s YouTube channel for more Al Brooks price action analysis.
S&P Emini market analysis
Emini daily chart
- The Daily chart formed a bad follow-through bar yesterday, following Tuesday’s large bear breakout. The Bulls are hopeful that today will form a strong reversal up.
- Yesterday is a reminder that the market is still within an overall trading range on the daily chart.
- The bulls are hopeful that today will create a bull reversal bar closing on its high. This would increase the risk that Monday’s bear breakout is a possible bear trap.
- Even if today creates a bull reversal bar, the upside will probably be limited.
- At the moment, the odds favor the bears getting a second leg down after Tuesday’s downside breakout. However, the pullback could be deep because the market is at support, moving average on the daily chart.
- It is possible that the market will go above Tuesday’s high before the bears get a second leg down.
Emini 5-minute chart and what to expect today
- The Emini formed a small gap up on the open and is trying to form a bull trend with bar 7.
- As of bar 7, the market is Always In Long. The bears want bar 8 to form a bear reversal bar and increase the risk of a bull trap.
- Bar 7 is strong enough that the odds favor a second leg up. The risk for the bulls is that bar 7 is a 2nd leg trap, and the bears will get a reversal down.
- The reversal down with bar 9 is a strong enough bear breakout that the upside is probably limited. This increases the odds of a trading range forming and not a bull trend.
- The selloff on bar 16 is a strong enough breakout that there is increases the risk that the high of the day is in.
- Bar 18 is a good follow-through by the bears and increases the odds of lower prices.
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.
