Emini Closed August 24th Breakout Point

Trading Update: Thursday September 7, 2023

S&P Emini pre-open market analysis

Emini daily chart

• The Emini gapped down yesterday and sold off below the August 24^th breakout point high and the August 2022 high.
• There were scale-in bulls who bought the rally up to September 1^st and got caught on the wrong side of a second leg trap. These bulls are now trapped in a losing trade and will probably look to exit on any reversal up.
• While the bears have done a good job with the overall selling over the past few days, the market will probably go sideways before it goes much lower.
• The bulls are still hopeful that yesterday is a 50% pullback of the rally that led to the September high. Next, they want another leg up that breaks beyond the September high.
• More likely, the market will go sideways over the next few days.
• Traders should be open to today being a disappointment bar for the bears.

Emini 5-minute chart and what to expect today

• The market sold off during the overnight session after forming a rally into the close, following yesterday’s early morning selloff.
• The bulls hope the market will form a major trend reversal and rally during the U.S. Session.
• Most major trend reversals lead to minor reversals and sideways trading. This means that traders should expect the open to have a lot of trading range price action.
• As I often say, most traders should wait 6-12 bars before placing a trade. This is because there is typically an 80% chance that the open will form a trading range, which means the first 6-12 bars of the day.
• There is only around a 20% chance of a trend from the open up or down.
• Most traders should focus on trying to catch the opening swing trade. They will typically begin before the end of the second hour, following a double top/bottom or a wedge top/bottom.@es
• Traders should pay close attention to yesterday’s low and the day’s open since the bulls. The market may try and rally today and form a second leg up after yesterday’s rally into the close.
• The Bulls should not have allowed bar 27 to form. This increased the risk of a TR and test down to prior breakout points, which is what is happening during bar 29.
• The market may try and test the Open of the day (bar 29).
• The bulls want bar 30 to be a double bottom with bar 18.

Emini intraday market update

• The rally to bar 3 was enough to make the market likely become a bull trend or a trading range day.
• There is an 80% chance of a trading range open, which means it was reasonable for bulls to exit below bar 4 due to the possibility of the market needing to form a double bottom and the risk of a second leg down following the gap down.
• The Emini formed a double bottom, getting a bull breakout above the neckline (Bar 3).
• The bulls want a measured move of the double bottom, which projects up to near yesterday’s close.
• The bears hope they can prevent the bulls from getting the upside breakout above bar 3.
• Today is unlikely to be a bear-trend day, and with the tail below yesterday’s low, the market was likely to have a hard time falling far below yesterday’s low.
• As of bar 15, the market is Always Long and likely to go higher.
• With bars 14 and 15 closing near their highs, the bulls will probably get a second leg up, and they might get a measured move up of the opening range.
• The bears need to undo the damage caused by bars 14 and 15. At a minimum, they need to form 2-3 consecutive bear trend bars closing on their lows in order to convince the bulls to give up.
• Bars 16 and 17 are consecutive bear bars, but the bears probably need 1 more bear bar closing on its low to cause bulls to give up. The bulls want bar 18 to form a High 1 buy signal bar and lead to a second leg up.

Yesterday’s Emini setups

Richard created the SP500 Emini charts (Al travelling). Chart time is ET+12 hours.

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. 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.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

• The EURUSD formed a bull doji yesterday. While yesterday’s bull doji is a bad buy signal bar, it is also a disappointing follow-through for the bears, which will convince some bears to take partial profits below yesterday.
• The bulls hope they can create a major trend reversal after the August 30^th trendline break. However, the bulls’ issue is that the bears are forming a 6-bar bear microchannel. This will increase the odds of any reversal being minor.
• The May 31^st low is 60 pips away, and the market may have to reach it before the bulls will come in and begin buying.
• It is possible that the market gets near the May 2022 low and reverses up just above it, making traders question if the May low was adequately tested.
• Overall, traders should be prepared for the bears to take partial profits below yesterday’s low. However, if there is profit taking below yesterday, any reversal up will likely be limited.

Summary of today’s S&P Emini price action

Richard created the SP500 Emini charts (Al travelling). Chart time is ET+12 hours.

End of day video review

Here is YouTube link if video popup blocked:

Emini End of Day Review – Thursday September 7, 2023 – Brad Wolff

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.

---