Trading Update: Monday December 29, 2025
S&P E-mini market analysis
E-mini daily chart
- The E-mini has drifted sideways to up over the past several weeks as the market approaches the all-time high going into the final days of the year.
- The bulls are hopeful that they can use the final three days of this year to rally above the all-time high and close above the 7,000 round number.
- This would be a sign of strength by the bulls, and give the appearance that the U.S. market was very bullish this year.
- If 2025 closes near its high, which is what is likely to happen right now, that will increase the risk that 2026 closes below the open of the year. The further up into resistance the open of 2026 is, the more difficult it will be for the market to rally above that price before next year’s close.
- The daily chart has had a lot of sideways trading over the past several months since October.
- The bulls are hopeful that the momentum to the upside will be strong enough that the market will rally and get a measure move up based on the 400-point trading range that began late in October.
- Even if the market does break above the October 29th all-time high and the top of the trading range. The odds are against the market getting a rally of 400 points without pulling back. 7,000 is such a major round number that the market will probably have to pull back once it breaks above it.
- The most important thing to remember on the daily chart is that the market has formed two legs up since the November low and is in the upper third of the trading range. This is a dangerous location for bulls to be buying because it is forcing bulls to buy high into an area of resistance, making the risk-reward not ideal.
- Currently, momentum favors the bulls as they have a prolonged micro channel over the last several days. However, because of the overlap in the micro channel and the market being near resistance (October 29th, all-time high), the probability is not ideal for the bulls, and makes it difficult for traders to buy up here.
E-mini 5-minute chart and what to expect today
- The E-mini gapped down on the open and rallied for the first two bars of the day.
- Because of the large gap down and bars 1 and 2 being fairly bullish, the odds are against the market forming a trend day up or down.
- The bears managed to get a reversal down on bar 3 and a test of the bar 1 low of the day. Because of the buying pressure on the open, the odds favor buyers below the bar 1 low. This lowered the probability of bears successfully making money below the bar 1.
- The bulls who bought the close of bar 2 were disappointed by the deep pullback below bar 1, and many of them used the bounce up to bar 14 to exit their longs. The bears knew the bulls were trapped, which led to both sides selling and a test down to the bar 9 low.
- Bears who sold during bar 9 got trapped by the reversal up to bar 14. Those bears were likely interested in buying back their shorts on a test of the bar 9 low which is what happened during bar 17. The bulls know this, which is why they bought during bar 17 as well.
- With both the bulls and bears using wide stops and scaling in, that increases the risk of failed breakouts, and today continuing to have a lot of trading range price action.
- Traders should assume that today will have a lot of trading range price action until they are proven wrong. This means traders should consider that most breakouts will fail until there is a clear breakout with follow-through closing beyond several bars.
Summary of today’s S&P E-mini price action
Richard created the SP500 E-mini chart.
E-mini end of day video review
Periodic end of day review videos will be moved to top of page when done.
EURUSD Forex market analysis
EURUSD Forex daily chart
- The EURUSD has formed a spike and channel bull rally that began on November 5th. While the rally has been good for the bulls, it is within an overall trading range. This increases the odds of the market going sideways near the 1.1800 price level.
- The bulls have at least three legs up and therefor the bears can argue that the daily chart is forming a wedge top (December 4th, 16th and 24th).
- First target for the bears following the wedge top is the bottom of the most recent major higher low, December 19th low.
- The bears do not mind the strong rally up to the December 24th high as long as it forms a lower high with the September 7th high. This would allow the bears to argue that the market is in the early stages of creating a broad bear channel. Next, the bears would want a test of the November low.
- The above wedge that I mentioned is good for the bears; however, it has open bull gaps. This makes the wedge somewhat parabolic and increases the risk of the wedge top leading to a minor reversal to the downside.
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 Trading Course 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.
