Trading Update: Wednesday August 20, 2025
E-mini end of day video review
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S&P E-mini market analysis
E-mini daily chart
- The E-mini formed a bear breakout following Monday’s weak high 1 buy signal bar.
- This increased the odds that today would be followed through on selling.
- The Bears will see the high of last week as a higher high major trend reversal. They are hopeful that the follow-through selling is strong enough to increase the odds that it will become successful.
- Even if the bears get a successful high or higher major trend reversal, the reality is the market will likely have to form some lower high. This means that the current sell-off will likely have to pull back, and therefore, the risk of missing a strong sell-off is fairly low without first getting a credible lower high major turn reversal.
- The rally up from the August low is fairly tight, and that also reduces the probability of the Bears getting a credible sell-off without having first to form a lower high. This would create a head-and-shoulders top.
- Most major trend verbs lead to trading ranges and go sideways for several bars; therefore, the odds are that this one will do the same.
E-mini 5-minute chart and what to expect today
- The open of the US session formed a small gap down and a bear trend from the open. The Bears got a trend resumption following yesterday’s Bear Trend Day. This was due to the higher time frame context on the daily chart.
- The market formed a strong bear breakout on bar 7; however, the bar was large and increased the climactic behavior.
- This meant that there was increased risk of a cell climax on the open in some variation of a parabolic wedge. In other words, the market went too far too fast.
- And the other reason the Bulls got the strong reversal up at bar 17 is because the sell-off reached a 50% pullback of the August rally on the daily chart.
- I mentioned above that the odds are against the Bears getting a higher high major trend reversal without forming a credible lower high.
- This increased the odds that the market would find buyers around 6,370, which was the midpoint of the August rally.
- The rally up to bar 24 is strong, and therefore, we’ve probably seen the low of the day. Because the sell-off to bar 18 was strong, the market may have to form a higher low; therefore, the market could get a deep pullback before the rally up to bar 24 gets a second leg up.
Yesterday’s E-mini setups
Al created the SP500 E-mini 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 E-mini.
Summary of today’s S&P E-mini price action
Al created the SP500 E-mini 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 E-mini price action real-time each day in the Brooks Trading Course trading room. We offer a 2 day free trial.
Charts use Pacific Time
When times are mentioned, it is USA Pacific Time. The E-mini 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.
