Trading Update: Friday September 6, 2024
S&P Emini market analysis
Emini daily chart
- The Emini formed a 2nd follow-through bar yesterday, following Wednesday’s strong bear breakout. This is creating a strong breakout, with follow-through below the daily moving average.
- While the rally up to the August high was good for the bulls, the context was not ideal because the daily chart is in an overall trading range.
- The bears did a great job halting the buying pressure and creating a tight trading range going into the end of August. This caused the bulls to begin to conclude that the probability no longer favored higher prices and was becoming neutral.
- This means that bulls would begin to sell out of longs, increasing the risk of a pullback and possible reversal down.
- The bears are hopeful that the recent selloff is the start of a test down to the August low.
- At the moment, the selloff is strong enough for a second leg down.
Emini 5-minute chart and what to expect today
- The Emini formed an opening reversal on bar 2, leading to a strong selloff down to bar 15.
- At the moment, the odds are high that the high of the day is in.
- The bears have created a 12-bar microchannel down to bar 15, which is a sign of very strong selling.
- The selloff is getting climactic, which increases the odds of a pullback to the moving average soon.
- Bar 15 is the best-looking bear bar in the selloff, and after a doji, bar 14. This increases the risk of a reversal back to the bar 14 close and a couple of legs sideways to up.
- While the bears have done a good job with the selling, the market still may transition into a trading range for several hours.
- Even if the market reaches the moving average, the first reversal up is likely to be minor. This means that the best the bulls can expect is a trading range lasting several bars.
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.
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.
