Emini Failed Low 1 Setup

Trading Update: Wednesday July 31, 2024

End of day video review

S&P Emini pre-open market analysis

Emini daily chart

• The Emini sold off yesterday below Monday’s Low 1, failed and found buyers below it.
• Monday’s low 1 was a bad signal bar for the bears, a weak bull bar (Globex Chart).
• The context was also not ideal for the bears selling below Monday’s low 1.
• The channel up to the July high is tight. This increases the odds of a trading range forming and not a bear trend.
• The bears likely need a credible major trend reversal before traders are convinced that they have a shot at a second leg down.
• Yesterday formed the third leg of a truncated wedge bottom with the July 19^th low and the July 25^th low. Truncated wedge bottom is when the final leg in the wedge does not go beyond the 2^nd leg and instead forms a higher low. This is a sign of buying pressure and eager traders buying.
• The overnight hours formed a strong reversal up on the Globex chart and the market is now testing the July 19^th breakout point low. This breakout point was expected to close because the odds favor a trading range.
• The rally up on the daily chart (Globex) is strong enough that the odds favor a couple of legs sideways to up and a test of the 5,600-round number.

Emini 5-minute chart and what to expect today

• The Globex market had a strong rally during the overnight hours and the U.S. Session opened with a large gap up.
• The Gap up is large and climactic. This will increase the odds of sideways trading on the open of the U.S. Session.   
• Today is an FOMC day, which increases the risk of the open of the U.S. Session having a lot of trading range price action going into the report.
• Most traders should consider being out of any positions at least 45 minutes to an hour before the report.
• If one is going to trade the report, they should wait for at least 10 minutes to pass once the report is released (2:00 PM EST) before placing a trade. This is because it is common for the initial FOMC bar to reverse.
• Traders should also be mindful of risk and make sure to trade small.
• If today is going to be a trend day, the odds favor a bull trend because of the gap up and rally up to bar 10.
• At the moment, the odds favor a bull trend or a trading range day.

Yesterday’s Emini setups

Al created the SP500 Emini charts.

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 continues to stall at the midpoint of the July rally.
• The selloff down from the July high is in a tight bear channel, which increases the odds that there will be sellers above, leading to sideways trading.
• The bulls are hopeful that the July high retest will be strong, increasing the odds of a breakout above the July 17^th high.
• Overall, the odds favor support and a test up to the July high. The bears need to continue to add to the selling pressure and, ideally, create a double top with the July high. After that, they would have a better chance of getting a successful downside breakout.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

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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