Trading Update: Tuesday July 9, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed a bear bar yesterday; however, because of the past three bull trend bars closing on their highs, the odds favor buyers below yesterday’s low.
- Yesterday is a warning of the bullish momentum beginning to weaken. This is the first requirement for the Bears to get a reversal down. This is a warning that the daily chart is beginning to stall.
- Next, the bears need to get a series of bear bars going sideways. If they can get a trading range with several overlapping bears, they will have a chance at getting a reversal down.
- Without the formation of a trading range on the daily chart, bears will be hesitant to bet on a successful reversal down.
- The odds favor lower prices. However, those lower prices could take months to happen.
- The 5,600 round number is a problem for the bears. The odds favor the seller on the test of the 5,600-round number. Those bears are willing to scale in higher, knowing that the odds favor a retest of the 5,600-round number.
Emini 5-minute chart and what to expect today
- The Emini had gone sideways for the first 9 bars of the session. This is a reminder that the market is in a trading range and likely to remain in one for several hours.
- The market is spending a lot of time just above yesterday’s high, which increases the odds that it will try to break below yesterday’s high.
- As of bar 9, the market is still on the buy above 1 and sell below 7. Right now, the odds probably slightly favor the sell below bar 7.
- The bears want to get a downside breakout below the 1 low and a selloff down to yesterday’s low. This would make the market go outside down. Because of how bullish the higher time frame context is, the odds favor a trading range and any selloff to become disappointing.
- The bears formed a second leg down with bar 12; however, the bar reversed up and created a terrible follow-through bar for the bears. This increased the odds of a failed breakout below bar 1, and a reversal up was likely. Always In Bears exit above 12.
- The Bulls formed a strong rally up to bar 15. However, it is at the top of a Trading range. The odds favor a second leg up, but the bulls might get a deep pullback before they get their second leg.
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.
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.
