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Emini Disappointing Follow-through

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Trading Update: Wednesday January 10, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed a disappointing follow-through bar yesterda after Monday’s strong bull reversal bar.
  • The market has been in a trading range for several trading days. This increased the odds that Monday’s bull reversal bar would get a disappointing follow-through.
  • Monday’s breakout is strong enough to expect a send leg up. This will increase the chances of the bulls getting a second leg up and a test of the December 28th high and the March 2022 high.
  • The selloff down to the moving average is likely a minor reversal. This means that the odds favor sideways to up trading and trend continuation of the bull rally that began in early November last year.
  • The bulls expect a test of the December 28th high because of the magnets above; the market will probably have to go a bit higher.
  • The Bears need to create more selling pressure than they have right now if they will achieve a successful major trend reversal.
  • Overall, the market will probably continue to go sideways for the next couple of days and disappoint both the bulls and the bears.

Emini 5-minute chart and what to expect today

  • Emini is up 1 point in the overnight Globex session.
  • The Emini has gone sideways for most of the overnight session and will likely open around yesterday’s close.
  • Traders should expect the open to have a lot of sideways trading. This means that most traders should consider not trading for the first 6-12 bars unless they are comfortable with stops, limit orders, and making quick decisions.
  • Most traders should focus on the opening swing that often begins before the end of the second hour. It is common for the opening swing to start after the formation of a double top/bottom, or a wedge top/bottom.
  • The most important thing to remember is to be patient and wait for a setup with a favorable trader’s equation.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Small PB Bull Trend from Open 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 continues to form a tight trading range following the January 2nd bear breakout below the moving average.
  • The bears are doing a good job getting close below the moving average. However, they need to do more.
  • The market is not clearly Always In Short and is still within a trading range. This will increase the chances of a deeper pullback than what the bears want to see.
  • As I mentioned yesterday, the market may have to test up to the December 27th high close and allow the trapped bulls out of their longs.
  • Overall, the bulls want a test of the December high, and the bears want a second leg down and a test of the December 8th low.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Lower Low DB Then Trending Trading Range Day

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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