Trading Update: Friday August 1, 2025
E-mini end of day video review
S&P E-mini market analysis
E-mini daily chart
- The Emini formed an outside down bar yesterday after forming a weak High 1 buy signal bar on Wednesday.
- I have been saying that the odds favored a test of the July 16th low for the past several days.
- This is because the daily chart is forming a prolonged bull channel, and the odds are it’s going to create a trading range.
- The bulls that are buying are momentum bulls, and those bulls are going to be quick to exit once the momentum begins to stall. One way those bulls can exit is below a bear bar, such as yesterday’s low.
- The Bears are hopeful that Friday’s sell-off on the daily chart will lead to a strong sell-off lasting several days. More likely, it’s going to become a bear leg in what will be a trading range.
- The channel up is tight, and therefore, the bears likely need a major tend reversal before the bears can get a credible major reversal down. This means that the market will probably have to test back to yesterday’s high over the next several days.
- The bears have finally broken below the moving average. Next, the bears need a strong close below the moving average and ideally several closes below the moving average. This is the first time traders have been able to buy completely below the moving average, and therefore, the odds are that there will be more buyers down here than sellers.
- Bulls will defend the July 16th major higher low and try to prevent the market from falling below it. As long as the market stays above its low, they can argue that we’re still forming higher highs and higher lows. At the moment, the odds are that the market’s going to fall below the July 16th low.
- Overall, while Friday’s sell-off is good for the Bears on the daily chart, the odds are that something will be disappointing with Friday’s bar. Meaning the day is probably not going to close on its low, and it will probably have a tail below the bar.
E-mini 5-minute chart and what to expect today
- The Emini formed a large gap down on the open and sold off for the first 4 bars of the day. While the bears were hoping for a bear trend from the open, that was unlikely due to the climactic nature of the sell-off and the higher timeframe context being at support, the July 16th low.
- This meant that it’s sideways after the bear breakout. Bar 4 was most likely, which is what’s happening so far as a bar 21.
- The Bulls were hopeful that the sell-off down to bar 4 is a consecutive sell climaxes on the higher time frame chart, such as the 60-minute Globex chart. This increases the risk of a reversal up and a test of the open of the day sometime today.
- The bars are big today, and therefore, the risk is bigger than usual. This means that traders must trade smaller than their average position size. In general, when in doubt, it’s better to deal 20% of your normal position size.
- Today is Friday; therefore, weekly support and resistance are important. The Bears want today to close on its low, creating a strong bear bar on the weekly chart. As I said above, it is more likely that today will have some tail below the bar.
- Because today is Friday, traders must be mindful of the possibility of a surprise breakout up or down late in the day as traders decide on the close of the weekly chart.
- At the moment, the odds slightly favor a test of the open of the day, due to the consecutive cell climaxes on the 60-minute chart and the daily chart being close, to support.
Yesterday’s E-mini setups
Richard created the SP500 E-mini charts – Al travelling.
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 E-mini.
Summary of today’s S&P E-mini price action
Richard created the SP500 E-mini charts – Al travelling.
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 E-mini price action real-time each day in the Brooks Price Action trading room. We offer a 2 day free trial.
Charts use Pacific Time
When times are mentioned, it is USA Pacific Time. The E-mini 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.
