Trading Update: Friday December 27, 2024
Emini end of day video review
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S&P Emini market analysis
Emini daily chart
- The Emini formed a strong reversal following last Wednesday’s bear breakout. While the Bulls have done a good job getting the reversal up, the odds favor the Bears getting a 2nd leg down after the December 18th bear breakout.
- The bulls are hopeful that the three consecutive bull bars on the daily chart are enough for the bulls to get a second leg up and a test of the December high. While this is possible, the risk the bulls face is getting trapped on a 2nd leg down that test below the December 18th bear breakout.
- The daily chart is transitioning into a trading range and beginning to get close below the moving average. This is a warning that the bears are gaining more control.
- A trading range does not mean an opposite trend but rather a halt in the current trend.
Emini 5-minute chart and what to expect today
- The Emini is getting a large gap down on the open of the U.S. Session. The bears are hopeful that bar 1 and 2 is the start of a trend from the open bear trend.
- The first 3 bars of the day are enough for traders to conclude that today will likely be a trading range day or a bear trend day, not a bull trend day.
- The market is far from the 20-period moving average on the 5-minute (RTH) chart. This increases the odds that the open will have to go sideways and get closer to the moving average.
- Because the selling pressure is strong on the open and the market is getting a big gap down, the odds are against a strong upside breakout without more buying pressure.
- Because of the daily chart forming three consecutive bull bars, there is an increased risk of an opening reversal up. If the bulls are going to get a strong reversal up, there will be plenty of time to buy once the reversal up is clear. The selling pressure is strong, and the bulls must first halt the selling.
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.
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.
