Emini Bears Want Follow-through on Weekly Chart

Trading Update: Friday August 11, 2023

S&P Emini pre-open market analysis

Emini daily chart

• The bears are trying to get a strong follow-through bar on the weekly chart following last week’s strong bear breakout. More likely, the follow-through bar will disappoint traders. This means that today has the potential to rally, creating a trail on the weekly chart.
• The Emini rallied above the past three days yesterday and sold off, forming an outside down bar. Outside bars are typically trading range bars more than trend bars. This means that the odds favor buyers below yesterday’s low.
• The bears now have six bars closing below the moving average (blue line). This is a sign that the bears are becoming stronger.
• The selloff down to the August low is enough to transition the market into a trading range but not a bear trend. While the odds favor a second leg down, the rally for the Bears will probably be further than what they want.
• Every new low over the past few days has found buyers. This means that the odds favor buyers below yesterday’s outside down bar.
• The bulls will want to disappoint the bears by forming an inside bar. This would create a second entry buy.
• Overall, the bears have done a good job with the selloff down to the August low. However, it is probably a bear leg in what will become a trading range. This means that the bears will likely look to sell any pullback. However, the pullback will probably be deeper than what the bears want.

Emini 5-minute chart and what to expect today

• Emini is down 12 points in the overnight Globex session.
• The overnight Globex market broke below yesterday’s low recently. The bears are hopeful that they will be able to form a bear trend day and form a strong follow-through bar on the weekly chart.
• More likely, today will disappoint the bears, and the market will try and form an early low of the day or a trading range day.
• Today is Friday, so the weekly chart is important. Traders will pay attention to the open of the week at 4,518.25. The bulls will try and get a close above the open of the week so they can claim that the bears got back follow-through after last week’s strong bear breakout.
• Traders should be prepared for a surprise breakout late in the day as traders decide to close the weekly chart.
• Traders should consider waiting for 6-12 bars before placing a trade. It is common for the open to form a trading range terrible for breakouts. A trader can often get trapped by waiting for 6-12 bars.
• However, if the open begins to form a breakout with follow-through, traders will look to buy, betting on a second leg toward the trend.
• Overall, traders must be open to anything and trade the chart in front of them.

Yesterday’s Emini setups

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. 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 EURUSD is forming a tight trading range above the July 6^th high. The July 6^th high is a magnet, and the market will probably reach its high over the next few days.
• The daily chart is in a trading range, meaning traders will expect gaps to close and limit order traders to make money. This means traders will bet on gaps closing, such as the July 6^th buy signal bar high.
• The bulls want the market to form a high lower with the July 6^th low and rally to the July high.
• The market will probably reach the July high and allow the scale in bulls to exit around the high close. However, the market may form a lower high first and get a second leg down before reaching the July high.
• Since the July high is probably a 2^nd leg trap, the market may have to fall below the July 6^th low before testing back up to the July high.
• Overall, the market is in a tight trading range within a larger trading range on the daily chart. This means that traders should expect sideways trading for the next several weeks.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

Brooks Trading Course Q&A with Brad Wolff

Join Brad Wolff here, or on YouTube Live at 2:15pm PT / 5:15pm ET:

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 Emini price action real-time each day in the BrooksPriceAction.com trading room days. 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 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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