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Emini Test Back Down to 5,600 Likely

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Trading Update: Monday July 8, 2024

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini formed a strong rally last week, breaking above the June 28th tight trading range.
  • Last week, strong buying pressure was formed, which is a sign of strength by the Bulls, but it was another buy climax late in a rally. This increases the risk of the past three-day rally being a buy vacuum test of the 5,600 resistance.
  • Because the market formed three consecutive bull bars in a strong bull trend, buyers will probably be below the first reversal down.
  • However, if the market forms a bear bar closing on its low, the risk of bulls getting trapped increases. This could lead to a test down to the bottom of the buy climax, the July low.
  • Today will likely disappoint the bulls and not form another strong bull trend day. This means traders should pay attention to last Friday’s high as it will likely be resistance today.
  • Overall, the bulls are still forming strong buying pressure, however, it is late in a bull trend. This increases the risk of profit taking and a pullback to the moving average soon.

Emini 5-minute chart and what to expect today

  • The Globex market formed a tight bull channel for most of the overnight and early morning hours. This reduces the chances that the open of the U.S. Session will become a bull trend from the open.
  • Traders should expect sideways trading on the open and forming a trading range. This means most traders should consider not trading for the first 6-12 bars unless they can make quick decisions.
  • Because the Emini is going to gap up, the odds are against the market becoming a bear trend from the open.
  • The market will likely go sideways on the open, forming a double top/bottom or a wedge top/bottom before it forms the opening swing. This means that there is no rush to enter.
  • A trader can consider waiting for either a double top/bottom or a wedge top/bottom before placing a trade.

Emini Intra-Day Update

  • The bulls formed a gapped-up bull bar on bar 1. They are hopeful that this is the start of a bull trend from the open bull trend. However, after three strong bull trend days, that is unlikely.
  • The bears want a failed breakout of yesterday’s high and a reversal down.
  • Although the bulls formed a bull bar on bar 1, the odds are against a bull trend day. The market is climactic on the daily chart, which increases the odds of sellers above Friday’s high.
  • The Globex market is climactic due to the overnight rally. This reduces the odds of a bull trend day today, which means that the market will probably fall below bar 1.
  • The market will probably test Friday’s close sometime today.

Friday’s Emini setups

SP500 Emini 5-Minute Chart High 2 Double Bottom Then Small PB Bull Trend Day

Richard created the SP500 Emini chart – Al travelling.

Here are reasonable stop entry setups from Friday. 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 is forming a series of consecutive bull bars, however it is within a large trading range.
  • This increases the risk of a deep pullback or reversal back down.
  • At the moment, the market is Always In Short, and the odds favor higher prices.
  • The problem with the bulls buying right now is that the risk is big and the probability is not great. This creates a poor trader’s equation and increases the odds of a reversal back down.
  • This means that traders are likely better off waiting to enter a pullback or waiting to see a breakout of the overall trading range.
  • If one looks at a weekly chart, one can clearly see that the range is contracting. This is a triangle and a sign that the daily chart is in breakout mode.
  • Because the market is in a triangle, the odds favor disappointment. This means that this week will probably have a lot of overlapping bars and not be as strong as last week.

Summary of today’s S&P Emini price action

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

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.

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