Trading Update: Friday July 26, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed a follow-through bar yesterday following Wednesday’s strong bear breakout. However, the selloff is getting climactic; this increases the odds of bears taking partial profits and the market getting a pullback lasting a couple of legs.
- The daily chart is likely Always In Short. It is the first strong reversal down following the tight bull channel on the daily chart, which increases the risk of a deep pullback.
- The recent selloff damages the bull case and increases the odds that the daily chart is transitioning into a trading range.
- The bears likely need a major trend reversal, which means the market may have to pull back for a couple of legs.
- The 5,500 round number was a likely support level for the market to reach. This means that bulls would be buying the 5,500 round number willing to scale in lower.
- Overall, the risk is getting big for the bears, increasing the odds of a pullback lasting a couple of legs.
Emini 5-minute chart and what to expect today
- The Emini has formed a tight bull channel on the 15-minute Globex chart following yesterday’s selloff into the close.
- Traders should anticipate today having a lot of trading range price action.
- The 5,500 round number is a likely magnet for the market to test.
- The first nine bars of the day have had many overlapping bars, which increases the risk of the market having a lot of trading range price action today.
- Today is Friday, so weekly support and resistance are important. The bears want today to close near yesterday’s low, which would cause the weekly chart to form a strong bear close. The bulls want the weekly chart to have a tail below the bar to damage the bear case.
- Traders should be prepared for a potential surprise breakout late in the day as the market decides on the close of the weekly chart.
- The market will probably test above yesterday’s bar 72 major low high as it is a likely magnet to test.
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.
End of day video review
End Of Day Review will be presented in the Trading Room today. See below for details on how to sign 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.
