Emini Bulls Need More Signs of Strength

Trading Update: Tuesday August 29, 2023

S&P Emini pre-open market analysis

Emini daily chart

• The Emini gapped up and closed above last Friday’s second entry buy signal bar.
• While the bulls did a good job creating a bull entry bar yesterday, the bulls need more signs of strength in order to make the market Always In Long.
• The bears are hopeful that the rally from the August 25^th rally will lead to a second entry short.
• The bulls see a double bottom with the August 18^th and 25^th low. Next, the bulls want an upside breakout above the neckline (August 28^th), and a measure move up.
• Even if the bulls get an upside breakout, the odds are that the daily chart is in a trading range. This means that the upside is probably limited and will likely lead to sideways trading.
• Overall, traders will pay close attention to see what kind of follow-through the bulls get today.

Emini 5-minute chart and what to expect today

• The overnight Globex market has gone sideways for most of the overnight session.
• Traders should expect the U.S. open to have a lot of trading ranger price action.
• This means that most traders should consider not trading for the first 6-12 bars unless they can trade with limit orders and make quick decisions.
• Most opens go sideways for the first 6-12 bars. This means the risk of missing a large move on the open is small.
• The most important thing on the open is to be prepared for anything and never deny the price action. If the market forms 2-3 consecutive strong trend bars on the open, the trader must find a way to enter at least a small position at the market.
• Overall, traders should pay close attention to the day’s open and yesterday’s high. The bulls hope they can get a close above yesterday’s high and increase the odds of higher prices on the daily chart. The bears want the opposite and are hopeful they can disappoint the bulls on the daily chart.

Emini intraday market update

• The Emini rallied on the open and formed a trend from the open bull trend.
• The bulls did a good job over the first 12 bars. However, it formed consecutive buy climaxes, increasing the odds of a trading range developing soon.
• As of bar 12, the bulls have reached a new high of the day with no sign of a top.
• The bears tried to form a higher high, major trend reversal. However, the rally to bar 24 is too strong, increasing the odds of more sideways to up trading.
• Traders should expect a test of the moving average soon. The upside is probably limited until the market reaches the moving average.

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 formed a parabolic wedge bottom yesterday. This will increase the odds of two legs sideways to up.
• The bear channel is tight, which increases the risk that any reversal will be minor and not lead to a major reversal.
• It is reasonable for bears to exit above yesterday’s buy signal bar and wait for two legs up.
• The bulls need a strong entry bar today to convince traders that they are beginning to take control. However, the bulls will likely be disappointed with today’s entry bar.
• The market is far from the moving average (blue line). This will increase the odds that the market will find a buyer not far below and get closer to the moving average.
• Traders will pay close attention today to see what kind of entry bar the bulls can get. Even if today is a bear bar, it will likely form a low 1 short. In general, low 1 shorts are weaker trades late in a channel, which increases the odds of buyers below.  

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

End of day video review

Here is YouTube link if video popup blocked:

Emini End of Day Review – Tuesday August 29, 2023 – Brad Wolff

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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