Trading Update: Wednesday May 20, 2026
E-mini end of day video review
S&P E-mini market analysis
E-mini daily chart
- The daily chart has been in a tight bull channel, and the market pulled back after testing the 7,500 round number on May 14th. Last Friday, May 15th, the bear reversal bar was strong enough to expect a second leg down.
- The bears got the second leg down yesterday, May 18th, although yesterday’s bar was a weak follow-through bar after the tight bull channel. It is an implied two-legged pullback: last Friday was the first push down, May 18th was the pause, and today, May 19th, we are getting a small second leg down.
- This is testing near the moving average, and because the moving average is a zone, it is reasonable for the market to start finding buyers near it. That is why the market is bouncing today. The odds favor a trading range, and the bears will likely be unable to get a strong reversal down, which means we may end up going sideways here.
- The bulls are hoping for a strong reversal up today and a test back to the high close from last Thursday. Even if we do get that, the odds will still favor a test of the moving average over the next several days, which limits the upside potential for the bulls.
- The market has been away from the moving average for so many bars that traders will expect a test of it fairly soon. The bulls are hopeful that today forms a strong reversal bar, increasing the odds of a breakout above last week’s high. However, in reality, there are probably sellers above today’s high and near the close of the all-time high, which was on May 14th.
- The bears need to increase selling pressure if they are going to get a strong reversal down. Right now, because the channel up is tight, the odds favor sideways as the best case for the bears until they can develop more selling pressure. Overall, the odds favor the bears getting a second leg down and a test of the moving average.
E-mini 5-minute chart and what to expect today
- Today gapped up on the open in the form of a small doji, but the gap up was small. The doji on the open was a sign that the odds favored sideways trading. The bears broke to the downside on bar 2 but found buyers below bar 1, and then the bulls got a small second leg up to the bar 4 high. Because of all the overlapping bars on the open, the odds favored more trading range price action.
- The market sold off to bar 9, where it formed an expanding triangle, with bar 1 and bar 4 as the tops and the selloff on bar 2 and bar 9 as the bottoms. The market tested near yesterday’s close on bar 9 and then rallied strongly on bar 9 and bar 10.
- Bar 10 was a strong bar for the bulls, but it had a tail above the bar, which is a sign of disappointment. A lot of traders saw the rally on bar 10 as a strong enough breakout to expect a second leg up, but because of the tail above the bar, they were likely more interested in buying a pullback. That is why bar 11 was a bad follow-through bar for the bulls.
- Bar 11 is a bear bar, but there are probably buyers below it, and that is why the market found buyers below the bar 11 low. The bulls got a bull inside bar on bar 12, which was a strong enough bar that the odds favored higher prices. The bulls ended up getting a parabolic wedge to bar 19, where the market formed a bear reversal bar. However, the parabolic wedge was tight, which lowered the probability of it being successful.
- The market tried to reverse down on bars 20 and 21, and the bulls broke strongly to the upside on bar 22. Although bar 22 is a strong bar, it has a tail above it and is a late breakout in a fairly climactic rally. That increased the probability that the market would get a deep pullback and test back to breakout points, which it did on bar 24.
- As of bar 24, the rally has been good for the bulls, but there are a lot of overlapping bars. That increases the odds that this is forming a trending trading range type of day and that the bull trend will not last all day.
- Overall, the market will probably have to go sideways for several bars. If it reaches the bar 22 high, there will likely be sellers not far above. Traders should expect the next couple of hours to have a lot of sideways trading, and then the market will decide whether the bulls can get trend resumption up or the bears can get a reversal down.
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.
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.
