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Emini Outside Down but Bad Context

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Trading Update: Thursday September 19, 2024

End of day video review

Emini EOD Review Price Action Rose

Follow PriceActionRose’s YouTube channel for more Al Brooks price action analysis.
Watch today’s Joseph’s EOD Review on his YouTube channel.

S&P Emini market analysis

Emini daily chart

  • The Emini went outside down yesterday following the release of the FOMC report. The signal bar is good for the bears; however, the context is bad due to the tight bull channel.
  • The odds favored the market going above the September 17th high, even though it was a bad buy signal bar.
  • The bears are hopeful that yesterday is the start of a reversal down. Yesterday’s outside down bar is within a tight bull channel, and the signal bar is big. This lowers the probability of selling below yesterday’s low.
  • The bears need to develop more selling pressure if they are going to get the reversal down and test the September 6th low.
  • While yesterday’s sell signal bar’s context is not great, traders will sell it, willing to scale in higher. This increases the odds that the market will test back to yesterday’s close after any rally.
  • The All-Time-high is the next magnet for the bulls to reach, and the market may have to get there. This increases the risk that the market will have to go above the all-time high before the bears can get a reversal down.
  • Overall, the Bears did a great job with yesterday’s outside down bar. However, they need to do more.

Emini 5-minute chart and what to expect today

  • The Globex market has been in a tight bull channel for most of the overnight session and went above the FOMC report bar high. They allowed the trapped bulls who bought during the FOMC report bar and more to lower out of their trade back at their original entry or better if they held during the rally.
  • Today is going to open with a large gap up. This increases the odds that the bulls will get a second leg up on the up, although the market may have to go sideways on the open first.
  • As I often say, most traders should be patient on the open and consider not trading for the first 6-12 bars unless they can use wide stops and scale in and are quick to make decisions.
  • Most traders should focus on catching the opening swing, which often begins before the end of the second hour, after forming a double top/bottom or a wedge top/bottom.
  • Traders should pay attention to yesterday’s high as it will likely be a magnet of the market to test due to yesterday being a large outside down bar. This increases the risk of sellers above its high.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Triangle Open Then Bear Breakout Failed

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

SP500 Emini 5-Min Chart Sell Climax Then Weak Rally and Trading Range

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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