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Emini Final Trading Day of July

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Trading Update: Monday July 31, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini reversed up after last Thursday’s (July 27th) large outside down bar. Today is the final trading day of July, which means traders should be open to the possibility of a surprise breakout up or down today.
  • While the reversal up is good for the bulls, the upside is likely limited, and the best the bulls will get is probably sideways. This means that we are probably sellers somewhere above last Thursday’s high.
  • Some bulls bought above last week’s high, hopeful that last Thursday’s upside breakout would be successful. Those bulls are now trapped after July 27th went outside down. Those bulls will likely be happy to exit breakeven around last week’s high.
  • The daily chart is evolving into a trading range which means traders are becoming more interested in buying value rather than buying because the momentum up is strong. This means the odds favor a test of the moving average (blue line). This means the Emini will probably fall below the July 27th outside down bar and touch the moving average.
  • Overall, traders should expect a 2nd leg down after the July 27th outside down bar; however, because the bull channel is tight, the market may go above the July 27th high before the bears get their second leg down.   

Emini 5-minute chart and what to expect today

  • Emini is up 8 points in the overnight Globex session.
  • The Globex market has been in a bull channel for several hours.
  • The bulls recently formed a strong upside breakout around 5:45 AM PT. However, the follow-through was met with the sellers.
  • The bulls are hopeful that this will lead to a successful bull breakout of a bull channel. The bears will likely overwhelm the bulls, and the 5:45 AM PT bull breakout will fail and lead to a trading range.
  • Traders should expect the open to have a lot of trading range price action. This means most traders should consider not trading for the first 6-12 bars. By considering not trading for the first 6 bars, a trader gains certainty on the day’s structure and can avoid any potential opening reversal common in the first half hour of the day.
  • Most traders should focus on the opening swing that often begins before the end of the second hour. It is common for the opening swing to begin after the formation of a double top/bottom or a wedge top/bottom. This allows a trader to wait for the formation of one of the abovementioned patterns before placing a trade to catch the opening swing.
  • Lastly, today is the month’s final day, meaning traders should be ready for anything. Institutions will be deciding on the close of the monthly chart, which increases the odds of a surprise move up or down today.

Friday’s Emini setups

SP500 Emini 5-Min Chart Bull Trend From The Open Then Trading Range

Al created the SP500 Emini chart.

Here are several reasonable stop entry setups from Friday. 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 Parabolic Wedge Bottom
  • The EURUSD formed a parabolic wedge bottom (green line) at the July 28th low. The bulls are hopeful that the parabolic wedge bottom will lead to a sharp reversal up.
  • However, most parabolic wedges should be seen as minor reversals. This is because a parabolic wedge is formed inside a tight channel, and breakouts of tight channels are often minor reversals that lead to sideways trading or resumption of the bear channel.
  • Since the market is in a trading range, the bears will probably be disappointed soon. Typically in a trading range, once one side has done something strong, they are often disappointed. The bears have a large outside down bar and a six-bar bear microchannel.
  • Overall, traders should expect the trading range price action to continue. However, since the bulls have a parabolic wedge within an overall trading range, it can potentially disappoint the bears and rally for a couple of legs.  

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Broad Bear Channel Trending Trading Range Reversals Day

Richard created the SP500 Emini chart (Al travelling).

End of day video review

Here is YouTube link if video popup blocked:

Emini End of Day Review – Monday July 31, 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.

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.

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