Emini Likely to Fall below Yesterday’s Low

Trading Update: Thursday August 22, 2024

S&P Emini market analysis

Emini daily chart

• The Emini formed another doji bar on the daily. This is the second doji bar in a row, which is a sign of hesitation in the 13-bar bull microchannel.
• A 13 bar microchannel is climactic behavior, which is extreme; the odds favor today falling below yesterday’s low. This would end the bull microchannel streak.
• The bears will likely look to sell any test of yesterday’s high as there is an increased risk of sellers above it and a possible outside down day.
• The Bulls have done a great job with the buying pressure. This increases the odds that buyers will be below, even if the market gets a couple of legs sideways to down.
• The 5,600 round number is a magnet below, and the odds are that it will get tested in the next few days.

Emini 5-minute chart and what to expect today

• Emini gapped up 20 points in the overnight Globex session.
• The Emini gapped up on the open, above yesterday’s high, and formed a bull bar with bar 1. While this is good for the bulls, it is a possible buy vacuum test of resistance, yesterday’s high.
• This increased the odds of the market getting an opening reversal.
• The market became Always In Short, with bar 8 closing on its low. Traders were likely willing to sell anywhere, expecting a second leg down.
• At the moment, the odds favor a test down to yesterday’s bar 31 low, which would end the 13-bar bull microchannel streak.

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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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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