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Emini Profit Taking at October 6th Low

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Trading Update: Tuesday October 24, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini found profit taking below the October 6th low and limit order bulls bought for a scalp.
  • While yesterday’s bull doji is a disappointment bar for the bears, it is not enough to undo the recent three large bear trend bars.
  • The bulls are hopeful that the selloff below the October 6th low will lead to a wedge bottom (August 18, October 6th). If this will form a wedge bottom, the bulls need to develop more buying pressure.
  • Without more buying pressure, the odds favor a second leg down.
  • The bulls got seven overlapping bars above the August 18th low two weeks ago. This means that bulls could make money buying below the August 18th low and increase the odds that bulls will be able to buy below the August 16th low and make money.
  • Some bulls may hesitate to buy below the August 16th low without a credible stop entry. They see the recent three-bar selloff as being strong enough for lower prices.
  • Overall, the Bears have a credible shot at getting a second leg down and a test of the midpoint (4,172) of the 2022 rally that began in October. The Bulls need to develop more buying pressure if they are going to get a successful reversal up.

Emini 5-minute chart and what to expect today

  • Emini is up 17points in the overnight Globex session.
  • The overnight Globex market rallied and tested near the highs of October 23rd. However, sellers were near its high, and the market is going sideways.
  • Today will probably have a lot of trading range price action. This means traders should pay close attention to the day’s open.
  • As I often say, traders should consider waiting for 6-12 bars before placing a trade. There is an 80% chance of a trading range open, and only a 20% chance of a trend from the open.
  • Most traders should try and catch the opening swing that often begins before the end of the second hour.
  • Traders should pay attention to yesterday’s high because it will probably act as resistance if the market goes above it.
  • Lastly, being patient is the most important thing on the open. There is plenty of time to find a couple of reasonable trades. The worst habit traders have, especially when they are starting out, is trying to force bad trades. The goal of a trader is to make money, not place as many trades as possible.

Emini intraday market update

  • The Emini went sideways on the open and broke to the upside during bar 11. However, the bulls failed to breakout far above yesterday’s high, and the market reversed.
  • The bears broke below today’s bar 5 low and tested near the bar 78 low.
  • While the selloff was strong, it had signs of trading range price action. Also, the opening range had a lot of trading range price action, lowering the probability of the market becoming a strong bear trend day.
  • Ther bulls recently revered up and tested the open of the day during bar 49m, however, the test missed the open by three ticks. This is usually not an adequate test of the open of the day, which will increase the odds that the market will go at least one tick above the 49 high.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Bear Trap Then Small Pullback Bull Trend

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 bulls formed a strong bull breakout yesterday. However, today stalled for too long, and the bulls gave up, creating a downside breakout.
  • The bears want a 2nd leg trap in a trading range, and a reversal down to the October low.
  • Traders will pay close attention to see how today closes. Because of the momentum down, there are likely trapped bulls and the first reversal down will probably fail.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Wedge Top Then Bar 42 Midday Reversal Up

Al created the SP500 Emini charts.

End of day video review

End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.

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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