Trading Update: Tuesday May 12, 2026
S&P E-mini market analysis
E-mini daily chart
- The daily chart continues to be climactic and is in a tight bull channel, testing above the 7,400 round number and getting close to the 7,500 major round number.
- Because there are consecutive buy climaxes on the daily chart, the odds are that the market will get a pullback and test closer to the moving average over the next several weeks.
- There was a strong late bull breakout on March 6, which was likely to get a second leg, but because it was climactic, there was an increased risk of exhaustion.
- Currently, the bears are trying to get a reversal down and a test down to the 7,200 round number and the moving average.
- While the odds favor a pullback given how climactic the daily chart has been, the downside risk is limited; even if the market sells off to 7,200 and the moving average, there will likely be buyers near that location.
- Traders will therefore expect any reversal down to be minor, because the risk is big for the bulls and the rally has been climactic.
- It is reasonable for bulls to wait and see what the pullback looks like, which means bulls may wait for two to three legs down to see how strong the bears are.
- Even if the bears do get a strong sell-off, it will likely be bought, and traders will therefore expect some kind of double top on the daily chart at a minimum.
- This means that the best the bears can expect over the next several months is a trading range.
E-mini 5-minute chart and what to expect today
- Today gapped down on the open and formed follow-through on bar 1. While the gap is small, the bears getting follow-through on bar 1 is a sign that the market is accepting the gap.
- The bears formed follow-through on bar 2, and that led to a second leg down after the reversal up on bar 3, which led to a second leg down to the bar 7 low.
- The move down to bar 7 looked like a parabolic wedge and a bear leg in a trading range; however, it was tight, and that lowered the probability of the bulls getting a successful reversal up.
- The bulls tried to get a strong reversal up on bars 9 and 10; however, it was a minor reversal below the moving average, and traders were likely to sell near the moving average. That increased the risk of the market forming a trading range as the best case for the bulls, and not a reversal up.
- The bears got a strong reversal down with bars 11, 12, and 13. That was a strong enough breakout and enough of a surprise that the bears would expect a second leg down, and even though the bulls had a decent reversal bar on bar 14, it is not enough to undo the selling.
- Bar 14 is important because of the buying pressure on the rally on bars 9 and 14. There is an increased risk that today is going to be a trending trading range day, and this means there is an increased risk that the market will probably test back to the bar 14 high later today.
- As of bar 24, the bears have done a good job with the selling, but it is getting climactic. Bar 23 is a bear breakout below the bear channel, and with the bulls getting a decent reversal up to bar 27, that increases the risk that we will probably get some kind of second leg up and test up to the bar 14 high.
- The bears have done a good job with the selling, the downside is likely limited for the next several hours, and the market is probably going to go sideways later in the day.
- The market will probably decide later whether we get trend resumption down or trend reversal up, because of the higher time frame context being fairly bullish, today is probably not going to be a strong bear trend day closing on its low.
- This means that today will more likely be some kind of trending trading range day with a lot of trading range behavior.
Yesterday’s E-mini setups
Richard created the SP500 E-mini chart.
Here are reasonable stop entry setups from yesterday. Chart shows each buy entry bar with a green arrow and each sell entry bar with a red arrow. Buyers of the Brooks Trading Course have access to a near 4-year library of detailed explanations of swing trade setups (see Online Course/BTC Daily Setups) linked to the Brooks Encyclopedia of Chart Patterns product.
The 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
Richard created the SP500 E-mini chart.
E-mini end of day video review
Periodic end of day review videos will be moved to top of page when done.
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.
