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Emini Bear Close below Open Wanted Today or Tomorrow

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Trading Update: Thursday January 26, 2023

Emini pre-open market analysis

Emini daily chart

  • The day chart reversed up from a gap down and closed on its high just under Tuesday’s high. Emini bear close below open wanted today.
  • This is the fourth consecutive bull bar on the daily chart. This increases the odds that today or tomorrow will have a bear close and end the bull streak.
  • While the bulls see the market as Always In Long, the past three trading days overlap, which increases the probability of more trading range price action.
  • The market is stalling at the bear trend channel line from the January 2022 All-time high and the August 16th high.
  • The bulls have a trend line from October 2022 low to January 3rd low.
  • The bear trendline above and bull trendline below create a dueling line, and soon one side will give up, causing a breakout. You can also call this a triangle; it has the same meaning behind it.
  • The most important thing to realize is that the market is forming a tight trading range at the 4,000 big round number. This has been an area of agreement for well over seven months. The market is satisfied at this price level.
  • While eventually, a breakout will happen, and the market will test the December 2022 low or the December 13th high, it is not yet clear which one will get tested first.
  • If the market had direction probability, it would be racing up or down and not going sideways like it has been for the past several days.
  • The bears want December 13th to become a major lower high, leading to a breakout below the December 13th low. While one can argue that December 13th is a major lower high, the problem the bears have is that the selloff down to the December 2022 low was a higher low and not a lower low.
  • It is reasonable to argue that December 13th is a major lower high, which means that the bulls will want to get above it and end the argument of a bear channel which is a weaker bear trend.
  • The bears have a slight probability advantage as long as the market makes lower and lower highs. Here, however, the market also formed a higher low with the December 2022 low, which signifies increased buying pressure.
  • The market is clearly in a broad bear channel with strong buying pressure. This is a trading range market that is slightly sloped down.
  • Whenever you have a trading range, there is always a trend reversal pattern: the higher low major trend reversal attempt at the December 2022 low. There is always a trend resumption pattern, which is not that clear at the moment. The bears will try and form a small double top with the January 17th high and the January 23rd high. Next, they want a downside breakout below the January 19th neckline of the double top and, eventually, a breakout below the December 2022 neckline. If the market breaks to the upside, the bears will try and form a double top with the December 13th high.
  • The market is in a trading range, so traders should expect continued confusion and disappointment. Traders should consider waiting for a clear breakout with follow-through.

Emini 5-minute chart and what to expect today

  • Emini is up 30 points in the overnight Globex session.
  • The Market has been going sideways for most of the overnight Globex session.
  • The 5:30 AM PT report was released, and, at the moment, it is forming an outside up bar on the 15 min chart.
  • The bulls want another strong bull trend day; however, the odds are against it.
  • Traders should assume that today will have a lot of trading range trading and disappoint the bulls.
  • With the past four trading days having bull closes on the daily chart, the market will probably get a bear close today or tomorrow and end the four-day bull streak.
  • As often said, most traders should be patient on the open and not trade the first 6 to 12 bars unless they are comfortable with limit order trading and scaling in.
  • Most traders should focus on waiting for a credible stop entry in the form of a double top/bottom, a wedge top/bottom, or a strong breakout with follow-through.
  • Overall, traders should expect a lot of trading range price action on the open and pay close attention to the open of the day, as the market will probably try and close below today’s open.

Emini intraday market update

  • The Emini gapped up and went sideways for the first two bars of the day.
  • The market formed a strong three-bar selloff on bars 3-5. This created a big up big down, big contusion, and increased the odds of a trading range day.
  • The market had a strong rally up to bar 12. However, after the three-bar selloff that ended on bar 5, the market was likely in a trading range, so it was not ideal to buy the bar 12 area.
  • The bears got two legs down to bar 18, where their market has been drifting sideways to up.
  • At the moment, the bulls are trying to get back to the open of the day. I am writing this as of 9:00 AM PT, and while the market has a credible chance at reaching the open of the day, traders should expect disappointment soon. The breakout at 9:05 AM PT is strong enough to increase the odds of higher prices so it is likely too early for the bears to sell.
  • Traders should be mindful that the rally may be a buy vacuum test of the open of the day. Once at the open of the day, the market may go sideways for the rest of the day and decide if the market will close below the open.
  • With the market having four bull bars on the daily chart, the odds favor a bear close today. However, traders should access the momentum to the open of the day and wait for selling pressure. It is very much possible that the day could be another strong trend day, but not likely.

Yesterday’s Emini setups

Emini wedge bottom and then small pullback bull trend with measured move up after breakout test. Emini bear close below open wante3d today.
Above is the version that I post every day. Because I often get questions about what Daily Setups chart Encyclopedia members see, today I am including the example below of that version.
Daily Setups Chart - Wedge Bottom and Small Pullback Bull Trend

Al created the SP500 Emini charts.

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 much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).

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

EURUSD Daily: Trading Range Likely, but No Sign of Top
  • The EURUSD daily chart is in a tight bull channel. While the market is forming a wedge top around the January 23rd high (see chart), the odds are that the wedge is minor and will lead to sideways trading at best for the bears.
  • The channel up is very tight, which increases the odds that the first reversal down will be limited.
  • On the weekly chart, the market is forming a strong trendline break of the bear channel that began in mid-2021. The bulls will likely need a higher low major trend reversal on the weekly chart.  
  • This means the daily chart will likely have to pull back to around the 1.044 price level over the next couple of months.
  • Overall, traders should assume that the market will continue sideways on the daily chart and test the moving average (blue line) soon.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

Emini sell the close bear trend from the open with trend reversal up from wedge and truncated wedge and small pullback bull trend

Al created the SP500 Emini charts.

End of day review

  • I will update at the end of the day.

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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