Trading Update: Friday December 22, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed a bull bar following Wednesday’s strong outside down day.
- Yesterday, we formed a High 1 buy signal bar. However, there are probably sellers above.
- The daily chart is late in a bull trend and far away from the moving average. This increases the odds of a pullback and test of the moving average.
- Wednesday’s outside down bar is strong enough for a second leg down. This is due to disappointed bulls who bought late in the bull trend and got trapped Wednesday. Those bulls will likely look to sell out of longs on any rally.
- The bulls want to trap the bears by getting a strong upside breakout above yesterday’s high. This would create a strong entry bar, trapping limit order bears.
Emini 5-minute chart and what to expect today
- Emini is up 10 points in the overnight Globex session.
- The Globex market rallied during the 8:30 AM PT report. The upside breakout is strong enough to expect a second leg up.
- As I often say, traders should expect a trading range open.
- Most traders should wait 6-12 bars before looking to trade. It is easy to get trapped on the open and take a loss betting on a breakout. By waiting for at least 6 bars, a trader gains a higher probability of catching the high or low of the day.
- Today is Friday, so weekly support and resistance are important. Traders should pay attention to the opening of the week as it will be a magnet.
- Traders should also be ready for a surprise breakout late in the day as institutions decide on the close of the weekly chart.
- More to follow*
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.
