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Emini Profit Taking at 6,000 Round Number

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Trading Update: Friday November 8, 2024

S&P Emini market analysis

Emini daily chart

  • The Emini reached the 6,000 round number yesterday, a logical magnet for the market to test.
  • This is a price level where the market will probably find profit taking over the next several days.
  • The momentum up is strong enough that the first reversal down will probably be minor, and the bulls may need a second leg up.
  • The bulls are hopeful that the recent upside breakout is a bull breakout of a bull channel that is going to reset the market cycle.
  • While this is possible, the bulls will probably be disappointed soon.
  • The bears need to increase the selling pressure and force the Always In Bulls (Swing Bulls) out of their trade. One way to do this would be to create a bear reversal bar closing on its low.
  • Today’s price is at an increased risk of forming a disappointment bar as bulls begin to take partial profits at the 6,000-round number. The risk is also getting big for the bulls, which increases the odds of a pullback soon.

Emini 5-minute chart and what to expect today

  • The overnight Globex market formed a trading range on a 15-minute chart during the overnight hours.
  • The selloff down to 6:00 AM EST was likely to fail and lead to a trading range.
  • The bulls formed a rally up to the high of yesterday on the open of the U.S. session.
  • The bulls are hopeful that the opening rally will lead to an upside breakout of the Globex range. However, it is more likely to fail and lead to sideways trading.
  • The bears will see the rally up to 9:45 AM EST (15-minute Globex chart) as a possible 2nd leg trap.
  • Today has spent a lot of time going sideways inside yesterday’s range.
  • The odds are that today, there will be a lot of trading range price action.
  • Most traders should consider waiting for 6-12 bars unless they can make quick decisions since most breakouts fail.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Bull Trend From Open Trading Range Late Breakout

Richard created the SP500 Emini chart – Al travelling.

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

Richard created the SP500 Emini chart – Al travelling.

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

  • The EURUSD formed a bull reversal bar yesterday. However, it is following a strong outside-day bear breakout bar.
  • Yesterday, there was also a tail above the bar, which increased the odds of sellers above yesterday’s high.
  • Bears who sold the November 6th outside down bar are likely disappointed with yesterday’s rally. This means that bears will consider buying back shorts at the low close (November 6th).
  • The bulls know this and will look to buy around this price level.
  • Overall, the odds favor an attempt at a second leg down for the bears. Because November 6th is a climatic bear breakout bar, the odds are it will lead to a trading range, not a measured move down. This means that the EURUSD may test the November 4th close over the next several bars.
  • If the market reaches the November 4th close, the bulls need to halt the buying pressure and prevent the bears from getting a strong second leg down.
  • The bears are hopeful that the bulls who got trapped by November 6th outside the down bar will be forced to sell out of longs, leading to a strong 2nd leg down.
  • Because of the trading range price action, the odds favor a trading range.

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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