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Emini Becoming a Breakout Mode Market

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Trading Update: Thursday November 21, 2024

S&P Emini market analysis

Emini daily chart

  • The Emini has formed a four-bar tight trading range on the open. This is a sign that the daily chart is close to neutral and entering breakout mode.
  • The bulls want an upside breakout above the tight trading range, which they got during the early morning hours today.
  • The problem with the bull case is that sellers are likely not far above due to disappointed bulls who bought the November rally.
  • The odds favor sideways trading on the daily chart. The bulls want a test of the November high, and the bears want a test of the November low.

Emini 5-minute chart and what to expect today

  • The market gapped up on the open and found sellers on bars 1-2. This is a strong enough bear breakout that the odds favor a 2nd leg down, which they are getting on bar 7.
  • The bulls want a double bottom and a trading range with the reversal on bar 3.  However, the selling pressure is strong enough that the market will likely fall below three and get a more symmetrical 2nd leg down.
  • Because of bars 1-2, the odds favor a trading range or bear trend, not a bull trend day.
  • The bars are big, so traders must trade smaller. When in doubt, it is best to trade 20% of a normal position size.
  • The bears are hopeful that bars 1-2 are strong enough for a measured move down to around 5,880.
  • The bulls  allowed too much buying pressure with bars 3-4, 9 and 15-16. This increased the odds that the market is evolving into a trading range.
  • As of bar 24 the market is Always In Long, however, the problem the bulls have is that there are probably sellers above bar 1.
  • This means that the odds of getting a strong upside breakout above the bar 1 high is low.
  • Bears looking to sell the bar 1 high are better off waiting for more selling pressure to develop and wait for a clear sell signal bar closing near its low.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Sell Climax Then Reversal Up

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 Wedge Bottom Then Bull Trend Reversal

Al created the SP500 Emini charts.

Emini 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 broke below the November 14th low today which was the minimum expectation after the 7-bar bear micro channel.
  • The bulls want a reversal up and a failed breakout below the November 14th low. However, the need a clear reversal bar.
  • Without  a clear bull reversal bar, there is an increased risk of the market going low and reaching the October 2023 low.

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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