Emini Hesitation above August High

Trading Update: Friday September 20, 2024

End of day video review

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S&P Emini market analysis

Emini daily chart

• Yesterday, I gapped up and closed as a bull doji bar. This is a sign of hesitation above the August High
• While the gaped-up is good for the bears, the odds favor sellers above the September 18^th high. This increases the risk of a test back down to the September 18^th low.
• Because yesterday is a doji bar at a new high, it is a sign of hesitation and a lack of momentum. This increases the risk of profit-taking and the market reversing back down to the September 18^th low.
• The bears want today to close on its low and below yesterday’s low. This would increase the risk of bulls exiting and the bears getting a couple of legs down.
•  The bears’ ability to create more selling pressure is a key factor in the potential reversal down to the September 6th low. While the odds favor lower prices, the daily chart may need to go sideways for more bars before the bears can execute this reversal, an essential understanding for traders.

Emini 5-minute chart and what to expect today

• The bears gaped down and formed a small 2^nd leg down to bar 7. While this is good for the bears, it looks more like a bear leg in a trading range than the start of a small pullback bear trend.
• The bears need to do more to create a small pullback bear trend. At a minimum, they need to create open gaps. This would trap the scale in bulls betting on a trading range, which would lead to a downside breakout.
• While the odds favor a reversal up to the moving average and bar 1 (writing during bar 7).
• This is exactly how trends from the open bear trends form. They typically look like bear legs in what will become trading ranges.
•  This traps bulls into buying below bars and scaling in lower. If the selloff continues sideways to down for a long enough period, it will lead to a breakout on a higher time frame and trap bulls in the wrong direction.
• A small pullback bear trend is not likely, but as of bar 9, the bears have an open gap with bar 1 low and bar 8 high. This increases the risk of a trend being underway. The Bulls need to close this gap. The bulls want a parabolic wedge with bar 9.
• Bar 9, the odds favor a test of the moving average. Bulls are getter off waiting for a credible bull bar before buying.

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.

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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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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