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Emini Strong Bull Reversal Bar

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Trading Update: Thursday August 1, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini rallied yesterday after the July 30th failed breakout of the Low 1 short (July 29th). This is a strong bull reversal bar on the daily chart.
  • The recent bear selloff on the daily chart became climactic and formed a wedge bottom, increasing the odds of a pullback lasting a couple of days.
  • Because the channel up on the daily chart is tight, the odds are that the bears will need to create a credible major trend reversal before the bears will be able to take control of the market.
  • This means that the daily chart has the potential to continue to go sideways for several bars in a trading range.
  • Yesterday’s rally was strong enough that the odds favor a second leg up. However, yesterday’s range was over 100 points (Globex chart). This means that it was climactic, and the bulls may have to pull back for a day or two before they get a second leg up.
  • The bears are hopeful that today will form a bear reversal bar and create a low of two on the daily chart. Even if the Bears get a reversal bar today, buyers will probably be below.

Emini 5-minute chart and what to expect today

  • Yesterday was a large climactic bull trend bar. This increases the odds that today will be a disappointing bar for the bulls, as they are likely exhausted.
  • Traders should pay attention to yesterday’s high as it will likely act as resistance.
  • The bears are getting a strong reversal down with bar 9. This was expected due to the Globex chart (15 Minutes) being in a trading range for the past several hours.
  • We have probably seen the high of the day (bar 4). So, it is reasonable to expect bears to look to sell any pullback.
  • The odds are against today becoming a strong follow-through day for the bulls, which I why the market is selling off.
  • As of bar 10, the market is always short and in a 7-bar bear microchannel. This increases the odds of the bears getting a second leg down. The selling is too strong, so bulls should wait for a clear trendline break and retest of the low, which would be a major trend reversal, before looking to buy. Traders should either be short or flat. This risk is big, so traders must plan accordingly and trade small.
  • When in doubt, trade 20% of normal position size.

Yesterday’s Emini setups

SP500 Emini 5-Minute Chart Broad Bull Channel and Expanding Triangle

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 Emini is in the middle of the trading range that has lasted for all of 2024.
  • The bulls formed a strong rally up to the July high; however, it formed a parabolic wedge top that led to a deep pullback.
  • The bears see the rally up to the July high as a second-leg trap and are hopeful that the recent selloff from the July high will lead to the bottom of the second leg, June 26th.
  • The Bulls are hopeful that the midpoint of the July rally will lead to support and a test of the July high.
  • Overall, the daily chart is in the middle of a triangle lasting more than seven months. This means the market is in breakout mode, and traders should assume the probability of both the bulls and the bears breaking out is close to 50%.

Summary of today’s S&P Emini price action

SP500 Emini 5-Minute Chart Small Pullback Bear Trend From Open

Al created the SP500 Emini charts.

End of day video review

End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.

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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