Trading Update: Thursday January 18, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini closed below the moving average yesterday, a sign of increasing bearish strength; however, the bears need more signs of strength.
- The bears hope the market is in the early stages of a major trend reversal. However, they will likely need to develop more selling pressure before the bears will be able to make the market Always In Short.
- At a minimum, the bears need a strong breakout below the moving average, ideally with follow-through. They can get this through strong consecutive bear trend bars or a series of bear closes below the moving average.
- The odds favor the recent month-long trading range, leading to trend resumption and a test of the March 2022 high.
- Overall, the next few days will probably disappoint the bears and lead to a bounce lasting a day or two.
Emini 5-minute chart and what to expect today
- Emini is up 15 points in the overnight Globex session.
- The Globex market rallied during the overnight session and will likely have a small gap up.
- Because the gap up will probably be small on the open, traders should expect that the gap will be closed.
- Traders should assume that the open will have a lot of trading range price action. This means that most traders should consider waiting for 6-12 bars before placing a trade. Unless they can trade with limit orders and make fast decisions.
- Most traders should try to catch the opening swing that often begins before the end of the second hour after forming a double top/bottom or a wedge top/bottom.
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.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD formed a disappointing follow-through bar yesterday, following Tuesday’s downside breakout.
- While the follow-through was disappointing for the bears, it is a bad buy signal bar for the bulls, which increases the odds that the bears will get at least a small second leg down.
- The Bears want Tuesday to be the start of a second leg down that is symmetrical to the January selloff.
- Next, the bears want the selloff to reach the December low.
- The bulls do not mind the selloff as long as it forms a higher low above the December low. Next, the bulls will want an upside breakout and a test of the December high.
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.
