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Emini Reversal Up Strong Enough for 2nd Leg

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Trading Update: Wednesday January 22, 2025

Emini end of day video review

Emini EOD Review Joseph Imbornone

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S&P Emini market analysis

Emini daily chart

  • The daily chart of the Emini has formed a strong reversal up from the January 13th low.
  • The reversal up is strong enough to make the market Always In Long, which increases the odds of a second leg up after any pullback.
  • the bears are hopeful that the current rally will form a double top with the December high, leading to a reversal down to the January low. Next, the bears would want a break below the January neckline of the double top and the market to fall for a measured move down to around the 5,450 price level.
  • If the bears get a successful double top, they first need to halt the buying pressure. Once they can make the market go sideways, they will have a chance at a possible double top major trend reversal.
  • Without more selling pressure, the odds favor buyers below the first reversal down at the bulls getting a second leg up.

Emini 5-minute chart and what to expect today

  • The Emini formed a large gap up on the open. The open will probably form a trading range and test into the gap.
  • As of bar 3, the gap is large and will likely close or get smaller within the next few hours.
  • The gap-up is good for the bulls and a sign of momentum. However, the more overlap the market gets, the more hesitant bulls will become buying this far away from yesterday’s high (the gap). This will increase the risk of a pullback test in the gap.
  • The gap up was strong enough that the odds favored a 2nd leg up. The Bulls are hopeful that the gap-up will lead to another bull trend day similar to yesterday. While this is possible, it is not likely, and the odds favor a trading range open.
  • The rally up to bar 6 is good for the bulls. However, bar 7 is a large trading range bar. This increases the risk that the breakout may begin to go sideways soon.
  • If the bears are going to get a reversal down, they will first need to increase the selling pressure by getting bear bars closing below their midpoints. Without this, the odds favor sideways to up.
  • Bar 7 is a warning that something is wrong with the bull rally.
  • Without a credible bear breakout with follow-through or a decent stop entry short, the bears will be hesitant to sell, and the bulls will continue to above and below bars.
  • The rally to bar 9 is strong enough that the odds favor a bull trend or a trading range day, not a strong bear trend. As I mentioned earlier, the bears need to increase the selling pressure if they are going to get a reversal down.

Yesterday’s Emini setups

SP500 Emini 5-Minute Chart Sell Climax Then Small PB Bull Trend

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

SP500 Emini 5-Minute Chart Bull Trend From Open Then Trading Range

Al created the SP500 Emini charts.

EURUSD Forex market analysis

EURUSD Forex daily chart

  • The EURUSD formed a bull breakout of the bear channel on January 20th, closing above the moving average for the first time since November.
  • The bear channel down was finding buying pressure below bars and was likely to transition into a trading range.
  • The January 20th bull breakout is strong enough for a second leg up. However, yesterday’s follow-through bar is an inside bar. While yesterday was a bull bar, it disappointed the bulls and increased the risk of sideways trading.
  • The bears need a strong reversal bar to convince bulls to exit. Without it, the odds favor higher prices.
  • At the moment, the market is Always In Long and likely to get a second leg 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.

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