Brooks Trading Course

Learn to Trade Price Action Consistently

 

More results...

Emini Buyers below Yesterday’s Reversal Bar

By

Trading Update: Friday September 1, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed a bear reversal bar yesterday. However, there are more likely buyers below.
  • The bears are hopeful that yesterday’s reversal down is forming a 2nd leg trap in the middle of a trading range. The problem with this argument is that yesterday’s bear reversal bar is small, which increases the odds of buyers below.
  • The bears want to reach the August 24th breakout point high and close the gap. The bulls want to keep this gap open as a sign of strength.
  • The bears need to show more signs of strength if they are going to get a reversal down. At a minimum, the bears need to create follow-through selling below yesterday’s bear reversal bar.
  • If the bears can get 2-3 consecutive bear bars closing below their midpoints, traders will be convinced that the bears are taking control.
  • More likely, the recent bull breakout is strong enough for a second leg up.

Emini 5-minute chart and what to expect today

  • Emini is up 25 points in the overnight Globex session.
  • Today will probably gap up, meaning traders should expect the bulls to get at least a small second leg up.
  • The market will probably go sideways on the open and get closer to the moving average.
  • Traders should be prepared for many trading range price action on the open and for the market to go sideways for the first 6-12 bars.
  • Today is Friday, so weekly support and resistance are important. The bulls want today to close near the high of the week. The bears want today to become a bear trend day and damage the bull bar on the weekly chart.
  • Traders should be prepared for a surprise breakout up or down today in the session’s late hours. This is due to traders deciding on the close of the weekly chart.
  • Lastly, traders should remember that there is an 80% chance of a trading range open. There is a 50% chance that the initial move up or down will completely reverse and go the opposite direction. There is an 80% chance of at least a minor reversal following the initial breakout up or down.

Yesterday’s Emini setups

SP500 Emini 5-Minute Chart Wedge Top Broad Bear Channel

Al created the SP500 Emini chart.

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

EURUSD Daily: Bears Want Bull Trap
  • The EURUSD broke above the moving average (blue line) two days ago. While the odds favor the bulls getting a second leg up, the bears were able to form a strong bear reversal bar yesterday.
  • Yesterday’s bear reversal is strong enough that the bears will probably get at least a small second leg down. This means that if today is a bull bar, there will likely be sellers above it, expect at least a small second leg down.
  • The bulls will try their best today to prevent the bears from getting follow-through selling below yesterday’s big bear bar.
  • While the bulls did a good job getting a breakout above the moving average, it was a bull breakout within a trading range. This increased the risk of the bulls getting a deep pullback before they get a second leg up.

Summary of today’s S&P Emini price action

SP500 Emini 5-Minute Chart Opening Reversal Failed Sell Climax Then Trading Range

Richard created the SP500 Emini chart (Al travelling). Chart time ET+12hrs.

End of day video review

Today’s End Of Day review will be presented in the Trading Room and only available to the trading room subscribers.

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.

>