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S&P 500 E-Mini Near Daily Moving Average

ByAl Brooks
Published 12/18/2024, 11:11 AM
US500
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ESH25
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S&P Emini market analysis

Emini daily chart
 

  • The S&P 500 Emini is near the daily moving average and will likely have to reach it in the next day or two. This is because the moving average is a reflection of the fair price, which is often tested when the market is transitioning into a trading range.
  • The daily chart is near the middle of a tight trading range that has gone on for at least two weeks. This puts the market in breakout mode, making the probability close to 50% for both the bulls and bears.
  • Today is an FOMC day, which increases the risk that the report will be the catalyst for the breakout of the tight trading range on the daily chart.
  • Overall, the daily chart is neutral going into the FOMC report. Traders should wait for a clear breakout of the tight trading range and assess the probability of success or failure.
     

Emini 5-minute chart and what to expect today
 

  • Today, a reversal was formed at bars 4-5 due to yesterday’s strong rally at bar 77.
  • Traders should expect a 2nd leg up after bar 5. The bulls need to break above the bar 78 high, or the bears will see it as a possible double top.
  • As mentioned above, today is a FOMC day. Traders should be flat at least 30 minutes going into the report. Most traders should stay flat for at least 10 minutes after the report.
  • The FOMC report typically increases the volatility, which means bigger bars. Traders should consider trading 20% of their average position size to ensure they are trading small.
  • Because there is an increased risk of volatility and reversal during the FOMC, traders should consider treating today as a half day and not trading the report.
     

Yesterday’s Emini setups
 SP500-Emini-5-Min-Chart-LL-DB-Then-Wedge-Top

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