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Emini Climactic Bull Breakout, 2nd Leg Up Likely

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Trading Update: Friday January 24, 2025

Emini end of day video review

Emini EOD Review Joseph Imbornone

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S&P Emini market analysis

Emini daily chart

  • The Emini formed a buy climax bar yesterday that is part of an 8-bar buy climax on the daily chart. The rally up is strong, which increases the odds that the first reversal down will be minor and lead to a 2nd leg up.
  • The bears hope the rally is forming a double top with the December high.
  • If the bears are going to get a successful double top, they need a decent bear reversal bar or a strong downside breakout. Without this, the bears need more selling pressure.
  • Ideally, the bears need a 2nd entry short to convince traders that the bears have a chance.
  • Overall, the rally is strong enough for a 2nd leg up and will probably go above the December high. However, because the daily chart is in a trading range, traders must be prepared for the rally up from the January 13th low to disappoint the bulls and lead to a prolonged pullback before the bulls get their second leg up.

Emini 5-minute chart and what to expect today

  • The Emini formed a strong buy climactic yesterday during the final bars of the session. Because the breakout was climactic, there is an increased risk of a reversal down and test of yesterday’s bar 72 breakout point.
  • The bears hope the open will form enough selling pressure to test down to the bar 76 breakout low.
  • Today formed a small gap up on the open. The bulls are hopeful that today will form another bull trend day; however, that would be the ninth consecutive bull bar on the daily chart, which is unlikely.
  • This means that the odds favor a close below today’s open. The bears hope they can end the bull micro channel streak. This means the bears will want to get a selloff below yesterday’s low.
  • Bar 1 went above yesterday’s high. The market may go down outside. However, the bears must get a strong downside breakout if this happens.
  • Most opens form a trading range. This means there is an increased risk of the first 6-12 bars going sideways and not getting a strong breakout. Traders who want a higher probability should wait for a clear breakout with follow-through before placing a trade.
  • Most traders should wait for 6-12 bars due to the odds of sideways trading.
  • Yesterday’s high will likely be resistance, which means bears will sell above it, expecting a reversal below it. The bulls need a strong breakout above yesterday’s high to convince traders to buy above it.
  • Today is Friday, which means the weekly chart is important. At the moment, it is going to close on its high.
  • The probability that the bulls have is that the rally is getting climactic. There is an increased risk of a tail above this week’s high forming. This means there is an increased risk of a selloff today, creating a tail on the weekly chart.
  • The most important rule with trading is to be open to anything. No matter how right your premise is, it is best to assume that there is at least a 40% chance you are wrong.

Yesterday’s Emini setups

SP500 Emini 5-Minute Chart Small PB Bull Trend from Open

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-Minute Chart Buy Climax Then Lower High MTR

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.

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