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Emini Large 2nd Leg Down on Daily

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Trading Update: Monday February 3, 2025

S&P Emini market analysis

Emini daily chart

  • The daily chart formed a bear reversal bar at the top of a trading range and formed a large 2nd leg down on the daily chart. The risk is big that the odds favor buyers today.
  • This is a reasonable sell for the bears due to the odds favoring the January 24th reversal getting a 2nd leg down.
  • January 27th formed a strong downside breakout, and the odds favor a 2nd leg down. However, because the daily chart has been in a trading range, there was an increased risk of a deep pullback before the bears got their second leg, which happened here.

Emini 5-minute chart and what to expect today

  • The Emini gapped down following last Friday’s strong reversal bar.
  • The gap down was large, which increased the risk of profit-taking and a reversal up due to the selloff getting in the buy zone of a trading range on the daily chart.
  • While the selloff on the open was strong, the odds favored the selloff becoming a bear leg in what would become a trading range.
  • The first 2 bars of the day were consecutive bull bars, which increased the odds of a trading range or bull trend day. Strong bear trend days typically do not have consecutive bull bars on the open.
  • The bar 11 bull breakout is a major surprise and will likely influence the market for the rest of the day. The odds favor a measured move of the bar.

Yesterday’s Emini setups

SP500 Emini 5-Minute Chart Bull Trend From Open Then Reversal Down

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

SP500 Emini 5-Minute Chart Wedge Bottom Then Major Bull Breakout

Al created the SP500 Emini charts.

Emini end of day video review

Periodic end of day review videos will be moved to top of page when done.

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.

        • Hey Ben,

          So, I’m commenting on the chart above, with the title “Yesterday’s Emini Setups”.

          Bar 43 is a small bull reversal bar, closing just above the MA.

          Like you say, it sets up a H2, so it could be considered a signal bar, and bar 44 would be the buy.

          And, like you mention, bar 43 is a higher low. It is also an inside bar, which is like a mini triangle that sets up break out mode. So, in that sense it could be a signal bar as well.

          Also, Bar 43 retests the top of bar 43, and that is a gap. Maybe the bull reversal bar isn’t strong enough to warrant a signal for bar 44.

          In the larger context, m y r e a d i n g of it is that the market is Always in Short: after the Minor Parabolic Wedge and the Lower High Major Trend Reversal, traders like us should mainly be looking to sell. So, there is an answer.

          What do you think?

          (By the way, bar 33 signals a bull entry, but bar 33 has a longer lower wick and completes a wedge. It also is before the Lower High forms. For comparison, Bar 43 only completes a second leg down and is is much smaller with less inertia.)

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