Trading Update: Tuesday January 21, 2025
Emini end of day video review
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S&P Emini market analysis
Emini daily chart
- The risk for the bulls is getting big on the daily chart. This increases the odds of a pullback over the next couple of days.
- Yesterday, the Emini formed a small bear bar, testing above the January 6th high. The bears are hopeful that the rally above January 6th will lead to a failed breakout and a reversal back down.
- It is possible that the more important lower high is the December 26th high and not the January 6th high. This means that bears will try from a lower high with the December 26th high, leading to a reversal bad down.
- The market is still in an overall trading range on the daily chart. While the reversal is good for the Bulls, they have not done enough to increase the odds of a successful breakout of the 2-month trading range. This means that even though the market has formed a 6-bar bull micro channel, the bears can still get a reversal down.
- Overall, the market is getting high in the range on the daily chart. This increases the risk of a pullback on the daily chart over the next couple of days. At a minimum, the market will likely go sideways for a few days.
Emini 5-minute chart and what to expect today
- The Emini opened with a small gap up and formed an expanding triangle over the first 7 bars of the day.
- The bears formed a large bear breakout bar, however, it formed a bad follow-through bar on bar 10.
- The bar 10 reversal led to a failed breakout for the bears and a reversal up.
- The bulls want a rally and test of the bar 4 high.
- The bulls are hopeful that they will be able to create a strong breakout with strong follow-through. That would increase the odds of a 2nd leg up and some kind of measured move.
Friday’s Emini setups (pre US holiday)
Al created the SP500 Emini charts.
Here are reasonable stop entry setups from last Friday (before market holiday close). 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.
