Trading Update: Thursday July 18, 2024
End of day video review
S&P Emini pre-open market analysis
Emini daily chart
- The Emini gapped down and sold off, creating a bear close on the daily chart. The moving Average is now within reach and likely to get tested over the next couple of days.
- The odds have favored a pullback to the moving average and a test of 5,600, which is likely what is happening right now.
- While the Bears did a great job getting the gap down with follow-through yesterday, they need to get more selling pressure today.
- The market will probably reach the 5,600 round number today or tomorrow.
- The odds favor the current selloff being a bear leg in what will become a trading range. This means that the best the bears can hope for is sideways trading on the daily chart for the next several weeks.
- The bears are hopeful that they will be able to get a strong downside breakout below the moving average with follow-through, which would increase the odds of lower prices.
Emini 5-minute chart and what to expect today
- The Emini went sideways on the open and rallied during bars 6-8. While this was good for the bulls, the market is still within an overall trading range.
- The bears formed a downside breakout on bar 13, which formed a strong breakout below the moving average, making the market Always In Short.
- The strong bear breakout down to bar 15 was likely to get a second leg down, which is what happened on bars 20-21.
- The next target for the bears is the 5,600 round number, which the market will likely reach.
- Bars 20-24 are too strong to buy, which means traders should only be short or flat, not long.
- Some bulls will be buying, but they are institutional bulls buying using a very wide stop and trading very small. This is far too difficult for more traders to do successfully.
- Because the market is testing the daily moving average right now, there is an increased risk of today getting a tail on the bar. This means that today will probably not close on its low.
- As of bar 25, there is far too much selling for traders to be buying. Traders should wait for a clear trendline break and retest of the moving average before looking to buy.
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.
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.
