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Emini Tight Bull Channel

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Trading Update: Friday December 6, 2024

Emini end of day video review

Price Action Rose EOD Review

You can also watch Joseph’s EOD Review for today on his YouTube channel.

S&P Emini market analysis

Emini daily chart

  • The Emini is continuing to form a tight bull channel on the daily chart. This increases the odds that the first reversal down will be minor.
  • The problem that the bulls have is that the current rally is a possible wedge top with October 17th and November 11th.
  • The bears are hopeful that the current rally is a wedge top with the most recent leg up to the December high, forming a parabolic wedge.
  • There are probably sellers above the November 11th high. This means that bears selling above and scaling in higher will likely make money. At a minimum, the market will probably test the November 11th high.
  • The bears need to form bear bars closing near their lows. This will cause the swing Bulls to consider selling out of longs and waiting to see what the reversal attempt looks like.
  • The bulls buying over the past several days are momentum bulls, and they will be quick to exit if bears show more signs of strength.
  • Overall, the bears need to increase the selling pressure and start forming bear bars, closing on their lows. Without it, the odds will favor sideways to up trading.

Emini 5-minute chart and what to expect today

  • Note: I am currently traveling in Europe and writing this report at 5:15 AM EST. Therefore, the open of the U.S. Session can look much different compared to what has been written in this report.
  • At the moment, the Globex market has not moved all that far relative to yesterday’s close.
  • There are potential market-moving reports at 8:30 AM EST that increase the risk of a breakout, leading to a larger gap up or down.  
  • Today is Friday, so weekly support and resistance are important. Traders should be prepared for a strong breakout late in the day as they decide on the close of the weekly chart.
  • As I often say, most traders should consider not trading for the first 6-12 bars unless they are above to make quick decisions. Most breakouts fail on the open, and in general, there is a 50% chance that the initial breakout on the open will be in the wrong direction, leading to a reversal.
  • There is an 80% chance of a trading range open and only a 20% chance of a trend from the open.
  • Trading ranges always form a double top/bottom variation or a wedge top/bottom. There is often a breakout of the opening range that leads to a measured move lasting two legs and two hours.
  • This means traders should look for one of the abovementioned patterns to form before placing a trade.
  • Overall, the key to trading the open is being patient and not rushing to place a trade.

Yesterday’s Emini setups

SP500 Emini 5-Min Chart Parabolic Wedge Bottom Then Wedge Top

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 Parabolic Wedge Top Buy Climax

Al created the SP500 Emini charts.

EURUSD Forex market analysis

EURUSD Forex daily chart

  • The EURUSD formed a downside breakout bar on December 2nd. However, it formed bad follow-through selling, which led to a reversal up and test of the November 29th high.
  • Selling during the December 2nd bear breakout likely led to a bear trap. This was because the market failed to reach the 20-period moving average on November 29th, and the odds favored that the market would reach the moving average.
  • The bulls need to get a breakout above the moving average with follow-through. Otherwise, bulls will exit longs, and bears will begin to establish shorts, leading to a reversal down.
  • Traders will pay close attention to see what kind of follow-through buying the bulls can create over the next day or two. The bulls are hopeful that today will look similar to yesterday’s (December 5th) bull breakout bar. That would increase the odds of a measured move up from the November low to the November 29th high.

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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