Trading Update: Friday January 12, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini gapped down and sold off yesterday after testing near the December 28th high. The bulls are disappointed after the recent three-day rally.
- The selloff yesterday is a reminder that the daily chart has still been in a trading range since late December.
- The bulls still have the magnet of the March 2022 high, and they will probably reach it soon.
- The bears have done a good job halting the buying. However, it is not enough. The odds still slightly favor trend resumption. The bears need to start getting more closes below the moving average if they are going to get a successful major reversal of the bull rally.
- Overall, traders should expect more sideways to continue up trading.
Emini 5-minute chart and what to expect today
- Emini is up 12 points in the overnight Globex session.
- The Emini is getting an upside breakout, just before the opening session.
- As always, traders should assume that the market will go sideways on the open. This means that most traders should consider not trading for the first 6-12 bars unless they are trading with limit orders and are quick to make decisions.
- Most traders should try and catch the opening swing that often begins before the end of the second hour. It is common for the market to form a double top/bottom or a wedge top/bottom before the opening swing begins.
- Today is Friday, so weekly support and resistance are essential. The bulls have a strong bull close so far on the week. They are hopeful that today will rally, causing the weekly chart to close near its high.
- Traders should be mindful that Friday often gets surprise breakouts late in the day, as traders decide on the close of the weekly chart.
Yesterday’s Emini setups
Al created the SP500 Emini chart.
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 EURUSD has gone sideways in a tight trading range following the recent downside breakout.
- The Bears want a second leg down and test of the December low. The bulls want a reversal up and a test of the December high close.
- The market is neutral, and if one side had a high probability, it would not be going sideways on the open.
- Overall, traders should wait for a breakout of the tight trading range and decide if the breakout is more likely to succeed or fail.
Summary of today’s S&P Emini price action
Richard created the SP500 Emini chart.
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.
when you say only 25% chance of going far above the earlier high do you mean the HOD or the H around 7:30?
Al usually doesn’t answer questions here but since he’s talking about a sell climax from the open, I’m pretty sure he means the prior HOD.
In yesterday’s setups, what exactly does the green highlighting of the bull bars mean?
Good question! That was buying pressure. Al explained that on the day’s Encyclopedia slides: “Many big bull bars closing near their highs so buying pressure.”