E-mini Breakout Mode Going into FOMC

Trading Update: Wednesday December 10, 2025

S&P E-mini market analysis

E-mini daily chart

• The E-mini closed as bear inside bar yesterday, which was a Low 1 short. The Low 1 short is a pullback, and today broke below the Low 1 and Monday’s low.
• I commented that last Friday was a bear reversal bar, even though it had a bull body, because it closed below its midpoint. When Monday sold off, forming a decent-sized bear bar, the odds were that the bears would get at least a small second leg down. This is what today created: falling below Monday’s low created a second leg.
• Because the reversal up from late November was strong, the odds are that the bulls will get a second leg up in a test of the 7,000 round numbers.
• The market has gone sideways for the past several days and is forming breakout mode. This means that the market is deciding on directional probability.
• The bulls want a second leg up after the reversal up from the November low. The bears want a bear breakout of the past five or six days.
• Right now, the odds favor a test of 7,000, even if the bears get a pullback first.
• Because of all the trading range price action we’ve had, the market may test back to around the midpoint of the rally from the November low to the December high. Even if the market does test down to the midpoint, the odds will still favor a higher low and a second leg up in a test of 7,000.
• The round number of 7,000 is significant. October 29^th came within 50 points of the round number.
• Because 7,000 is such an important round number, the market coming within 50 points is probably not an adequate test. This means that the market will probably have to get a second leg up and actually break the 7,000 price level.
• Overall, the market is in breakout mode, waiting for the FOMC announcement. The market may use the FOMC as the catalyst for a breakout up or down of the recent multi-day trading range. This means the market is in breakout mode going into the FOMC announcement.

E-mini 5-minute chart and what to expect today

• The mini gaps down on bar 1, which was a bear breakout below the bear channel from yesterday.
• The sell-off during bar 2 was strong, but it became too climactic, and many traders bought back their shorts, leading to a sharp reversal up on bars 2 and 3.
• Bear breakouts of bear channels have about a 25% chance of success, which means the odds are that there would be buyers below bar one in the market that would form a trading range in reverse back up to the top of the channel.
• The market was forming lower highs and lower lows going into the close of yesterday, and that made yesterday’s bar 78 a major lower high for the market to test. This meant that the 78 high from yesterday was a vital test magnet, and the market reached it around bar 24.
• While the rally up to Bar 22 is strong with the three consecutive bull bars closing on their highs, it was still inside of an overall trading range, and this lowered the probability for the bulls getting immediate follow-through.
• The bears ended up getting a prolonged pullback to Bar 39. However, the bulls have buying pressure on the way down. Because the rally up to Bar 22 is strong, the odds are the bulls will get a second leg up and test the 24 high later today.
• As of bar 39, the odds favor an upside breakout. However, today is an FOMC day, and that makes it dangerous for traders to hold long at this time.
• Most traders should be flat at least 30 minutes before the FOMC announcement. This is because it’s easy to get trapped in a losing trade if you use a wide stop and scale in. Because of this, many traders are hesitant to trade right before the FOMC so that they can be flat going into the announcement.
• It is important to remember to trade small during the FOMC announcement. In general, traders should trade at 20% of their normal position size.
• Most traders should wait at least ten bars after the FOMC announcement before they place a trade.
• Many traders should not trade the FOMC. This is because the FOMC announcement is a low-probability event, and that makes things that appear high-probability lower probability than they actually are. And it makes things that appear lower probability actually slightly higher probability than what they would normally be. Something that is typically 60% chance or higher goes down to 55%, and something that is normally 40% goes up to 45%.
• The risk is also bigger because of the increased volatility on a typical FOMC announcement. This makes it particularly dangerous for traders who are starting because they have no way to reduce their position size.

Yesterday’s E-mini setups

Richard created the SP500 E-mini chart.

Here are reasonable stop entry setups from yesterday. Chart shows each buy entry bar with a green arrow and each sell entry bar with a red arrow. Buyers of the Brooks Trading Course have access to a near 4-year library of detailed explanations of swing trade setups (see Online Course/BTC Daily Setups) linked to the Brooks Encyclopedia of Chart Patterns product.

The 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 E-mini.

Summary of today’s S&P E-mini price action

Richard created the SP500 E-mini chart.

E-mini end of day video review

Periodic end of day review videos will be moved to top of page when done.

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EURUSD Forex market analysis

EURUSD Forex daily chart

• The EUR/USD has been continuing to go sideways in a prolonged trading range since July. The market is currently around the midpoint of the range, which makes it particularly dangerous for traders buying in this area.
• This means the EUR/USD is in breakout mode and waiting for a breakout up or down.
• The bulls have done a good job with the rally up to December 4th; however, it’s climactic and a possible parabolic wedge. Parabolic wedges should be thought of as breakouts on higher timeframes, meaning the reversal is typically minor and gets continuation in the direction of the parabolic wedge.
• This means that the odds favor the bulls getting some second leg up.
• Traders who want a higher probability are better off waiting for more clarity. Because the Euro vs. the Dollar is in the middle of the overall trading range, lasting many months, it is not an ideal location for traders to establish positions.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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Trading Room

Al Brooks and other presenters talk about the detailed E-mini price action real-time each day in the Brooks Trading Course trading room. We offer a 2 day free trial.

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Charts use Pacific Time

When times are mentioned, it is USA Pacific Time. The E-mini 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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