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Emini Becoming Climactic

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Trading Update: Tuesday July 18, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The daily chart has had six consecutive days without falling below the prior bar, indicating bullish strength. However, this also makes the market climactic and increases the odds that the Emini will fall below yesterday’s low (4,536.25).
  • Traders should expect the next day or two to lead to sideways trading and disappoint the bulls.
  • The channel up from the July 10th low is tight, which increases the odds that the first reversal down will be limited.
  • The first target for the bears is 4,500; however, for them to reach it, they will likely need to develop more selling pressure first.
  • Traders expect a pullback soon and will closely monitor the strength of the pullback. If the bears can get consecutive strong bear closes, that will increase the odds of a second leg down and lower prices.
  • Overall, the market is Always In Long, which means the odds favor higher prices and a second leg up. However, as mentioned above, traders will pay close attention to any pullback to measure the strength of the bears and the determination of the bulls to buy and pullback.

Emini 5-minute chart and what to expect today

  • Emini is down 4 points in the overnight Globex session.
  • The 60-minute Globex chart sold off, forming a second leg down after yesterday’s late end-of-day selloff at the close of the U.S. Session.
  • The market is in the middle of a trading range that has gone on for a day or two.
  • Traders should be neutral going into the day and assume that the odds favor a trading range open.
  • This means traders should expect a limit order market to last for the first 6-12 bars at a minimum. Most traders should consider not trading unless they are comfortable using wide stops and scaling in.
  • There is at least an 80% chance that the open will form the opening swing after forming a double top/bottom or a wedge top/bottom. This means a trader can wait for one of the patterns mentioned above to form and enter a stop taking a chance of catching the opening swing and getting more than twice their risk.
  • Lastly, traders should pay close attention to yesterday’s low as it will likely be an important magnet today.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Small Pullback Bull Trend From The Open

Al created the SP500 Emini chart.

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. 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

EURUSD Daily: Minor PB Likely
  • The EURUSD had a strong rally last week. However, it is becoming climactic, which increases the odds of a pullback lasting a few days.
  • The risk is getting big for the bulls, so institutions must manage their risk properly. This means they will likely need to reduce risk by taking partial profits. This will increase the odds of a brief pullback.
    The bears know this and will look to sell, betting on a brief pullback. However, they know some bulls will look to buy any pullback betting on higher prices.
  • Overall, the odds favor higher prices. However, the market may have to pull back first before the bulls can get a second leg up following last week’s strong bull bars.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Strong Bull Trend From The Open

Richard created the SP500 Emini chart (Al travelling).

End of day video review

Today’s End Of Day review will be presented in the Trading Room and only available to the trading room subscribers.

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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