Trading Update: Tuesday January 28, 2025
Emini end of day video review
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S&P Emini market analysis
Emini daily chart
- The Emini formed a large downside breakout bar yesterday, following last Friday’s bear reversal bar. This is a reversal and increases the odds of disappointed bulls near the December high.
- Yesterday’s selloff was strong. However, it became too large and found buyers once it reached the bottom third of the two-month trading range.
- The reversal up on yesterday is strong enough for a second leg up. This increases the odds of a rally and test of yesterday’s high over the next day or two.
- Yesterday’s large downside breakout is a reminder that daily chart is in a trading range. This increases the risk of disappointed bulls and profit-taking near the December All-time high, even if we go above it.
- The market formed a strong rally last week, followed by a strong reversal down. This is a big up and down, increasing the odds of the market going sideways over the next several days.
Emini 5-minute chart and what to expect today
- The Emini sold off and the open, forming a strong reversal on bar 4.
- The rally up to bar 12 is strong and increases the odds that the first reversal down will be minor.
- The bears are hopeful that bar 12 is forming a parabolic wedge top. While this is possible, it is not a high probability. The bears must add to the selling pressure before it becomes a high probability to short.
- Because the rally up to bar 12 is climactic, there is increased risk of sideways trading, lasting a couple of legs.
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.
