Trading Update: Thursday January 30, 2025
Emini end of day video review
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S&P Emini market analysis
Emini daily chart
- The Emini formed a bear inside the bar yesterday, closing above its midpoint. The two-bar rally that ended on Tuesday is strong enough for a 2nd leg up. This means that the odds favor a rally above Tuesday’s high. However, because yesterday’s event was an inside bar, there were likely sellers above.
- The bears are hopeful that there will be sellers above yesterday’s high and the market will fail to form a strong entry bar.
- The gap down on Monday is strong enough for a 2nd leg. This increases the risk of bulls getting trapped and the market selling off to Monday’s open.
- Because of the buying pressure over the past few days, the bears need a decent reversal bar closing on its low. Next, the Bears would need a strong entry bar, and at that point, the odds would favor a 2nd leg down.
- The bears are trying to defend the last Friday’s low, which is the breakout point following Sunday’s selloff. This increases the risk of a test of last Friday’s low since most breakout points get tested and close, especially in a trading range.
Emini 5-minute chart and what to expect today
- The Emini gapped up and formed a rally on the open. However, it lacked consecutive bull bars closing on their highs. This increased the odds of the market getting a reversal down and test of the bar 1 low.
- The bears formed a two-legged selloff down to bar 12. While the bears did a good job, there was too much overlap, which increased the odds that the selloff down to the 12 low was a bear leg in what was likely to become a trading range.
- The bulls formed a strong tow bar reversal on 13 and 14. This increases the odds of a second leg up.
- The bulls are hopeful that bar 13 will lead to the day’s low. While this is possible, it will become a higher probability if bra 15 is another strong bull bar closing on its high. Because of the trading range price action today, the odds favor the bulls getting disappointed by the rally, leading to a bull leg in what will become a trading range.
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.
