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Emini Continued Tight Trading Range Behavior

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Trading Update: Wednesday October 30, 2024

S&P Emini market analysis

Emini daily chart

Emini Daily Tight Trading Range
  • The Emini went outside yesterday following Monday’s weak bear inside the bar just above the moving average. The Emini is continuing to show signs of tight trading range behavior.
  • Yesterday’s outside up bar is good for the bulls. However, the context is bad because the bar forces bulls to buy in the middle of a tight trading range.
  • The daily chart is holding above the moving average, which is a sign of strength.
  • The Bulls want the pullback from the October high to become a bull flag and get trend resumption up to the 6,000 big round number.
  • The bears want a bear breakout below the bull flag and a measured move down from the October high to the October 23rd low, projecting down to the 5,677 price level.
  • Selling pressure is developing in the channel up from the September low, which increases the odds of a trading range developing.
  • The Bulls have open negative gaps that are open at the August 26th high and the October 26th high (see green boxes on above chart).
  • If those gaps stay open, there is an increased risk of a measuring gap and test of the 6,000 round number.
  • Overall, the daily chart forms a tight trading range, a breakout mode pattern. The market is close to 50% for both bulls and bears.

Emini 5-minute chart and what to expect today

  • The Emini gapped down on the open and sold off for the first 3 bars of the day. While this is good for the bears, bar 3 was large and climactic.
  • Bar 3 was also testing the bottom 1/3rd of yesterday’s range, which is more of a buy zone than a sell zone.
  • The bulls have a strong reversal up with bars 4-5.
  • Because of the solid selloff for bar 3, followed by the reversal up on bar 4-5, this increases the odds that today will have a lot of trading range price action and will likely not become a trend day up or down.
  • The Bulls hope that bar 4 is a possible day’s low. At the moment, bar 4-5 is strong enough for a second leg up.
  • The bulls formed a strong rally up to the bar 10 high.
  • The market is Always In Long, and the odds favor buyers below and a second leg up.
  • The problem the bulls have is that the market is high in a tight trading range on the daily chart. This increases the risk of a reversal down reaching the Bar 1 high or the open of the day.
  • The bulls are hopeful that today will form a strong bull trend and break out far above yesterday’s high. If this happens, there will be plenty of opportunities to get long.
  • As of bar 11, the risk is getting big for the bulls. This increases the odds of a pullback lasting a few legs sideways to down.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Bear Trap Bull Breakout and Channel

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.

Emini end of day video review

Periodic end of day review videos will be moved to top of page when done.

EURUSD Forex market analysis

EURUSD Forex daily chart

EURUSD Daily Reversal Up to Moving Average
  • The EURUSD formed a bull reversal bar yesterday after forming a second leg down following the October 25th bear reversal bar.
  • The EURUSD is stalling at the August low and is beginning to build buying pressure. This increases the risk of a reversal up and a test of the moving average.
  • It was reasonable for Always In Bears to exit above yesterday’s bull reversal bar.
  • The Bulls are trying to get an upside breakout today. However, they will likely be disappointed with the rally.
  • If the bulls can get a series of strong bull closes, it will increase the odds of a reversal up to the September 11th breakout point low.
  • Overall, the odds favor a reversal up to the moving average. However, because the channel down to the October low is tight, the current reversal up is likely to be minor. This means that the market will probably fall below the October low sometime soon

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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