Trading Update: Tuesday August 19, 2025
E-mini end of day video review
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S&P E-mini market analysis
E-mini daily chart
- Yesterday, a weak bull bar formed after last Friday’s bear reversal bar. While this is disappointing for the Bears, who are hoping to get followed through selling below last Friday, it is also a weak high 1 buy signal bar for the Bulls buying above yesterday’s high. This increases the odds of sideways trading and sellers above yesterday’s high.
- The Bulls see a 9-bar bull microchannel up to the August 13th high, and they suspect that the first reversal down will be minor and lead to a second leg up above its high.
- The channel up from the August low is tight. That lowers the probability of the bears getting a strong reversal down. The bears will need to increase the selling pressure and make the market go sideways for several bars before they will have a chance at getting the reversal.
- The risk is big for the bulls, and therefore the odds favor more sideways trading and a test of the moving average.
- As I mentioned above, while the odds are the market is going to pull back, the bears will likely need to increase the selling pressure before they can get a credible reversal down. Even if the bears do get a reversal down, they will likely have to form a low or high after any sell-off. This lowers the downside risk of missing a strong bear breakout.
- Therefore, there is an increased risk that traders will wait to see what the bear breakout looks like and then look to sell pullbacks of it. Overall, the daily chart is likely to continue to go sideways.
E-mini 5-minute chart and what to expect today
- The U.S. session gapped down and formed a large bear bar on the open. Bar one had a relatively big risk and has not yet clearly formed a successful breakout below yesterday’s range. This increased the risk of the Bulls getting a reversal up, which they did on bar 2.
- The Bears got trapped with the reversal up on bars 2-3, and the Bulls got a large second leg up on bar 7.
- So far, bars 1 and 7 are relatively big compared to the bars to the left. This is a sign of more climactic behavior and increases the chances of more trading range price action.
- Think about it, if bar 7 is such a strong bull breakout, why did the market pull back for 3 bars? That is a sign that traders are using bars like 7 to take profits on their longs and looking to buy pullbacks, which is a sign of trading range price action.
- Bar 7 is enough of a surprise that even if the market does get a pullback, it’ll likely have to retest the close later today. This means that Bar 7 will probably get an incredible second leg.
- The Bears are hopeful that they can get a successful reversal down and a test back to the seven low. They want to trap the Bears and ultimately test down to the bar one low.
- The Bears got trapped selling the close of Bar 1. Because the market’s in a trading range, traders will ultimately hope that the market will test down to the 1 close. At the moment, the odds are against it, and the reversal up to the 7th high is strong enough that it’ll likely get a second leg up.
Yesterday’s E-mini setups
Richard created the SP500 E-mini charts – Al travelling.
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 E-mini.
Summary of today’s S&P E-mini price action
Al created the SP500 E-mini chart.
EURUSD Forex market analysis
EURUSD Forex daily chart
- Yesterday, the EURUSD formed a bear bar closing on its low. This is a possible wedge top and increases the risk that we test down to the July low.
- The sell-off to the July low formed a strong bear breakout that was likely to get a second leg down. The August 1st rally was enough of a surprise that many bears would look to buy back their shorts, anticipating at least a small second leg up.
- However, because the market is in a trading range, it’s reasonable to expect the sell-off to the July low to get retested after any pullback.
- Bears will likely look to establish shorts around this price level, taking a chance that the market will form a lower high and sell off to the July low.
- The bulls are trying to create a weak follow-through bar and disappoint the bears by selling below yesterday’s bear reversal bar. Even if today forms a weak bull bar, it’ll be a high one. Late in a bull rally increases the risk of sellers above.
- Overall, the market’s probably going to get a pullback here and test near the July low.
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.
