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Emini Testing August High

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Trading Update: Wednesday September 18, 2024

S&P Emini market analysis

Emini daily chart

  • The Emini formed a bear doji bar after testing above the August high, which is an important magnet.
  • As I mentioned in the prior blog post, the rally up to the August high was strong enough that the odds favor a retest of the highs after any pullback, which happened during the sell-off down to the September 6th low.
  • While the September 6th selloff was likely to be a minor reversal, it is enough of a selloff to increase the odds of a trading range. This means there are probably sellers above the August high.
  • The Bulls have done a great job with the rally up from the September 11th low, and it is probably strong enough for a second leg up. However, the risk is getting big for the bulls, and the profit potential is not great because the daily chart is in a trading range.
  • This increases the odds of a deep pullback as more bulls begin to take partial profits. The bulls have a microchannel from the September 11th low. This increases the likelihood that the first reversal down will find buyers and that the bears will need a second entry short.
  • The daily chart will likely continue to go sideways over the next several days and will probably test down to the bottom third of the September 6th selloff sometime over the next several weeks.
  • The bears are hopeful for a double top lower high, major trend reversal with the August high.  However, it is more likely to lead to a minor reversal rather than a major reversal.

Emini 5-minute chart and what to expect today

  • Today is the FOMC meeting, which means traders should expect an increase in volatility when the report is released at 2:00 PM EST.
  • Traders should be mindful of the risk and trade small. In general, most traders should risk 20% of their normal position size if they are going to trade the FOMC report.
  • It is important to wait at least 10 minutes before trading after the report is released.
  • Most traders should consider not trading the report and treating today as a half-trading day.
  • Traders should go flat at least 30 minutes before the report is released.
  • Most FOMC reports lead to sideways trading; however, traders must be prepared for anything. The most important thing is not to be in denial of the price action, no matter what one believes regarding the FOMC accountment.
  • On the open, traders should assume that today, there will be a lot of trading range price action and should consider not trading for the first 6-12 bars.
  • Most traders should wait for a double top/bottom or a wedge top/bottom before placing a trade. This is because it is common for the pattern mentioned above to form before the market forms the opening swing.
  • The key to the open is to be patient and not in a rush. When in doubt, stay out and wait for more clarity regarding the price action.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Wedge Top Then Bear Trending Trading Range Day

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

SP500 Emini 5-Min Chart Triangle Open Then Bear Breakout Failed

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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