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Emini Disappointing Rally Likely

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Trading Update: Tuesday September 10, 2024

End of day video review

Emini EOD Review Joseph Imbornone

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End Of Day Review was presented live in the Trading Room today. See below for details on how to sign up.

S&P Emini market analysis

Emini daily chart

  • The Emini formed a bad follow-through bar following last Friday’s sell climax. This increases the odds that the market will have to pull back a couple of legs before the bears can get a second leg down.
  • The bulls are hopeful that yesterday is the start of a bear trap leading to a strong reversal. More likely, the bulls are going to be disappointed by the rally, and it will lead to a trading range and not a strong breakout above the August high.
  • The risk for the bears is that the recent selloff is a pullback from the August rally that will have to get retested. This means the bears selling here have bad risk/reward and a probability of less than 60% of a measured move down of the past four bear bars.
  • The bears have a high probability of getting a second leg down but not yet a high probability of getting a measured move down over the past four bear bars.
  • This is why selling in a trading range is not ideal. It creates a situation with bad risk/reward and lower probability, which usually leads to a deep pullback.
  • Today will probably not become a strong bull bar. This means that bears will see today as a breakout pullback sell signal (Low 1). 
  • Low 1 Sell signal bars typically lead to pullback, followed by an attempt at trend resumption. This means that there will probably be buyers below today’s low. 

Emini 5-minute chart and what to expect today

  • The Globex market opened with a small gap after breaking out of the high of the trading range, which lasted for several higher.
  • The early morning rally was likely to become a bull leg in a trading range, and it was met with sellers, leading to a reversal.
  • The bears formed a strong bear bar on Barr 9, making the market Always In Sort and increasing the odds of a second leg down.
  • While bar 9 is good for the bears, it is a large climactic bar in a day with a lot of overall. This increases the odds of a trading range, and disappointment before the Bears can get a second leg down after bar 9, which is why bar 12 happened.
  • At the moment, the odds favor the market falling below the bar 10 high and allowing the bar 9 breakout bears to get their second leg down.
  • As of bar 15, today will likely be either a trading range day or a bear trend day and not a bull trend day. A trading range is most likely.

Yesterday’s Emini setups

SP500 Emini 5-Minute Chart Wedge Bottom 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.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

  • The EURUSD sold off going into the end of August, which increased the odds of a second leg down.
  • The September 9th rally was a reversal up that was likely to find sellers above, which it did.
  • Because the rally up to the August high was strong, the odds favored a retest. This increased the odds that the rally above the September 9th high would go further than what the bears wanted.
  • As of the close of today, the bears have three consecutive bear bars closing near their lows.
  • The bears are hopeful that the bulls who bought the September 6th low are trapped, which will increase the odds of lower prices.
  • While the bears have done a good job, the context favors the bulls. The rally up to the August high is tight, which increases the odds of buyers below.

Summary of today’s S&P Emini price action

SP500 Emini 5-Minute Chart Low 2 Top and Then Wedge Bottom

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.

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