Trading Update: Wednesday January 8, 2025
Emini end of day video review
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S&P Emini market analysis
Emini daily chart
- The Emini is forming a triangle on the daily chart, which is a breakout mode pattern. This makes the probability close to 50% for both the bulls and the bears.
- The bears want a 2nd leg down after the December 18th bear breakout. Next, they want a measured move down of the two-week trading range and a test of the November low.
- The bulls want the market to form a failed breakout between the January 2nd low and a wedge bottom with December 20th and January 2nd, and the reversal up.
- The daily chart will probably continue to go sideways and disappoint both bulls and bears.
- Overall, the daily chart forms a triangle, and the direction probability is close to 50% for both the bulls and the bears. Most traders are better off waiting to see what the breakout looks like and then deciding on if the breakout is likely to succeed or fail.
Emini 5-minute chart and what to expect today
- The overnight Globex market formed a downside breakout during the early morning hours. However, it failed to break far below yesterday’s low. This increases the odds of the market having a lot of trading range price action today.
- There is an 80% chance of a trading range open and only a 20% chance of a trend from the open.
- Most traders should wait 6-12 bars before placing a trade unless they can make quick decisions.
- There is an 80% chance of a swing trade beginning before the second hour ends. The market will usually form a trading range before the opening swing begins. This means traders can wait for a double top/bottom or a wedge top/bottom before placing a trade.
- Trader should pay attention to yesterday’s low as it will likely be an important magnet today. The bulls want to prevent the bears from getting follow -through and closing below yesterday’s low.
Yesterday’s Emini setups
Richard created the SP500 Emini chart – 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 Emini.
Summary of today’s S&P Emini price action
Al created the SP500 Emini chart.
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.
