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Emini Likely to End Micro Channel Soon

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Trading Update: Friday August 16, 2024

S&P Emini market analysis

Emini daily chart

  • The Emini gapped up and formed a bull bar closing on its high. The daily chart is in a 9-bar bull micro channel. This increases the odds that today or tomorrow will end the microchannel and fall below the prior day’s low.
  • The bears are hopeful that the recent rally on the daily chart is a buy vacuum test of the 5,600 round number. Next, they are hopeful that the bears will be able to accumulate selling pressure, increasing the odds of a reversal down.
  • Without more selling pressure, the best the bears can likely get is sideways.
  • The daily chart is in a trading range, and the market is now in a high range. This means that the bulls will likely become disappointed at this price level.
  • Because the rally up is strong, the odds favor a second leg up. However, since the market is high in a trading range, the bulls risk having to hold through a deep pullback before they get their second leg up.
  • The bears are hopeful that the recent rally is forming a double top with either the August 1st high or the July 16th high.
  • Overall, the first reversal down will likely fail and lead to a second leg up.

Emini 5-minute chart and what to expect today

  • Emini gapped down 14 points in the overnight Globex session.
  • The Globex market went sideways to up for most of the overnight session before selling off in a tight bear channel down to 8:45 AM EST.
  • While the 8:45 AM selloff was strong, the context was bad for the bears, and the odds favored a trading range more than a bear trend. This meant there were likely buyers below scaling in lower, which is why the market rallied to the bar 10 high.
  • Emini is trying to form a parabolic wedge with bar 10 and test down to the bar 1 low.  It is reasonable for Always In Bulls to exit below the bar 11 low.
  • Bears will sell below bar 11, expecting two legs down.
  • The bears have a 4-bar bear microchannel with bar 14. While the selloff below the bar 11 low has a lot of overlap, the bears are beginning to take control of the market. This increases the odds of lower prices and a test below the bar 1 low.
  • The bears are hopeful that they can get a strong downside breakout and reach yesterday’s low at 5,526.25. This would end the 9-bar bull micro channel streak on the daily chart.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Double Bottom and 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.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Chart Higher Low DB Then Trending Trading Range Day

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.

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