Trading Update: Tuesday December 3, 2024
Emini end of day video review
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S&P Emini market analysis
Emini daily chart
- The Emini formed a bull bar closing above the November 11th prior swing high. While this is good for the bulls, the daily chart is likely to find profit-taking soon.
- The bulls are hopeful that the Emini is going to get a successful breakout above the November 11th high and a measured move up. However, the bulls will likely be disappointed, and the market will get a reversal below the November 11th breakout point high.
- The bears have made money selling above new highs for the past 2 months. The bears were also able to make money selling below bars. This means that the odds favor the current bull channel evolving into a trading range and the market testing down to the November 15th low sometime over the next few weeks.
- The bears need to create more selling pressure to convince more traders to begin to sell.
- There are momentum bulls who will continue to buy all the way up and exit below a bear bar closing on or near its low. Bears will sell above the November 11th high and look to scale in higher. If the bulls are able to create a strong upside breakout, that would trap the bears into a losing trade and the bulls out of a winning trade.
- Without a decent bear reversal bar, the bears must make the market sideways for several bars. This would increase the number of bulls selling out of longs and bears beginning to establish shorts.
- Overall, the odds favor a trading range and a test of the November 15th low. However, the daily chart may have to go sideways to up for several bars before the bears can reverse down.
Emini 5-minute chart and what to expect today
- Note: I am traveling in Europe and typing today’s report at 4:00 AM EST. The market may look very different once this report is released.
- The Overnight Globex market (60-minute chart) has been inside of yesterday’s late tight trading range.
- Last Friday formed a strong bull breakout, and the odds favored a 2nd leg up on the 60-minute chart. Yesterday, I formed a second leg up for the Bulls.
- The Globex chart forms a triangle that makes the market breakout mode.
- Traders should assume that today, there will be a lot of trading range price action on the open. Traders should consider waiting for 6-12 bars before placing a trade unless they can use wide stops and are quick to make decisions.
- Traders should pay attention to yesterday’s high. It is likely a magnet, and there are probably sellers above its high.
- Today will probably disappoint the bulls, leading to a trading range day.
- The most important thing on the open is to be patient and not rush to place a trade.
- There is an 80% chance of a trading range open and only a 20% chance of a trend from the open up or down.
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 chart.
EURUSD Forex market analysis
EURUSD Forex daily chart
- The EURUSD formed a bear breakout bar yesterday after forming a parabolic wedge top on November 29th that was also testing the 20-period daily moving average.
- Yesterday’s bear breakout failed to close on its low and will likely find bad follow-through today. This means there are probably more buyers below yesterday’s low than sellers.
- The Bulls want today to form a bull reversal bar closing on its high. This would be a breakout pullback buy setup.
- Next, the Bulls want a bull breakout of the bear flag (November 22nd low to the November 29th high) and a measured move up, which projects up to the 1.0861 price level.
- The bulls need today to form a strong buy signal bar closing on its high and for tomorrow to form strong follow-through buying.
- The daily chart has only had one bar closing above the moving average since October 1st. This is a sign of strong selling pressure and increases the odds of a trading range forming and the bulls not getting a strong upside breakout.
- The Bulls have a wedge bottom with October 23rd, November 14th, and 22nd. This increases the odds of the bulls getting a two-legged rally.
- Overall, the Bulls need a strong reversal up with follow-through buying above the moving average before the market becomes clearly Always In Long.
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.
