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Emini Profit Taking after Test of 5,000 Round Number

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Trading Update: Tuesday August 6, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed a downside breakout on the Globex daily chart.
  • While yesterday’s selloff was strong, it was a sell vacuum test of the 5,000-round number. Because the market is climactic and near the 5,000-round number, bears are beginning to take profits.
  • Yesterday, the market reached 5,120, and traders began buying.
  • Bulls bought them because they were nearly 5,000, and bears began buying back shorts.
  • The odds favor the bears being disappointed today and the market closing above the day’s open.
  • The bulls want to test the 5,300 round number today and yesterday’s Globex high.
  • The odds favor profit-taking and a couple of legs sideways to up on the daily chart. However, the selloff from the July high is strong enough that the odds favor a second leg down and the market falling below the 5,000-round number.
  • The 5,000 round number is an important price, and the market will likely spend a long time near that price level. Just like the market did when it was at 4,000 a couple of years ago.

Emini 5-minute chart and what to expect today

  • The bulls formed a strong upside breakout to the bar 8 high.
  • This is a strong enough breakout that the odds favor a bull trend or a trading range day. This means that today is unlikely to become a bear-trend day.
  • The bulls want the market to reach the 5,300-round number, as well as yesterday’s high.
  • As of bar 8, the market is Always In Long and likely to get a second leg up.
  • The bulls formed a strong rally up to the bar 16 close. The bears are getting a deep pullback on bar 21. However, the odds favor a trading range and not the strong bear trend.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Bull Trend from Open and Then Trading Range

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.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

  • The EURUSD formed a bear inside bar today following Monday’s weak breakout above the July high.
  • The bulls hope there will be buyers below today’s low, leading to a second leg up above the August 5th high.
  • While Monday’s rally was strong, the bar was climactic and much bigger than the average bar. This increases the risk that the recent rally is a possible buy-vacuum test of resistance.
  • The selloff from the August 5th high is strong enough that the Bears will likely get a second leg down.
  • The bears want tomorrow to lead to another strong entry bar closing on its low. This would increase the risk of a second leg down and a test of the August low.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Bull Trend from Open and Then Late Reversal

Al created the SP500 Emini charts.

End of day video review

End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.

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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