Trading Update: Monday August 26, 2024
End of day video review
S&P Emini market analysis
Emini daily chart
- The Emini formed a Bull inside the bar last Friday after the prolonged microchannel on the daily chart.
- The microchannel lasted for 13 bars, which is a sign of strong buying. This increased the odds that last Thursday’s outside down bar would find buyers.
- The odds favored a test above the August 22nd high of the microchannel, which is what happened during today’s open.
- While the odds favored sellers above the August 22nd high, the rally over the past month is strong. This increases the odds that the market will have to go sideways for several bars before the bears can get a strong reversal down.
Emini 5-minute chart and what to expect today
- The Emini broke above the August 22nd high during bar 1 today and found sellers.
- As of bar 14, the bears are creating a small pullback bear trend.
- The bulls are hopeful that the selloff to bar 15 is consecutive sell climaxes, which is a parabolic wedge. However, the selloff is a strong breakout on a higher time frame. This increases the odds of the market going lower, and the best that the bulls can hope for is a trading range.
- While the market is in a small pullback bear trend, there is only a 20% chance that the selloff will continue without first forming a trading range.
- This means that there is a 60% chance that the current small pullback bear trend will evolve into a trading range at some point today.
- However, a trading range does not mean a rally back to the open of the day. This means that bears selling and scaling in higher will likely be able to avoid a loss, even if the pullback is deep.
- If the bulls are going to get a reversal, they will need to create a Major trend reversal. This means they need to close above the moving average. Without it, the odds favor any reversal up being minor and lead to a trading range.
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.
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.
