Trading Update: Thursday October 3, 2024
End of day video review
See Price Action Rose’s YouTube channel for more Al Brooks price action analysis.
You can also watch Joseph’s EOD Review for today on his YouTube channel.
S&P Emini market analysis
Emini daily chart
- The Emini formed a bull reversal bar, closing above its midpoint yesterday after reaching the 20-day exponential moving average.
- While this is a good bar for the bulls, it is part of a five-bar bull microchannel. This increases the odds of sellers above.
- The bears need a more credible downside breakout if they are going to break below the moving average.
- This increases the risk that the daily chart will go sideways. The bulls may have to test up to the September high and form a double top. Next, the bears want a break below the neckline (yesterday’s low) and a measured move down.
- Because of the selling pressure down to the September low, there is an increased risk that the Emini will test back down to below 5,600.
- Overall, traders should expect sideways trading over the next several days and a possible double top to form.
Emini 5-minute chart and what to expect today
- The Emini formed a wedge bottom and failed bear breakout below the bar 1 buy signal bar. The Bulls formed a strong upside breakout during bar 7. However, the breakout bar was large, which increased the odds of sideways trading.
- 9 is a surprise and a strong enough downside breakout that the odds favor a second leg down. Bulls who bought the close of bar 8 are disappointed with bar 9 and will use any bounce to likely reduce their loss or exit near the bar 8 close.
- Traders should expect a 2nd leg down from bar 9.
- The rally up to bar 8 and selloff on bar 9 is strong enough to increase the odds of a trading range day, not a trend day. Any selloff we get will likely form a trading range and not go far. The bears need a clear breakout with follow-through below the bar 5 low. Without it, the odds favor a bear leg in what will become a trading range.
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.
