Trading Update: Monday January 30, 2023
Emini pre-open market analysis
Emini daily chart
- The Emini has six consecutive bull bars on the daily chart. Traders should expect a bear close today, with likely close below open, or tomorrow to end the bull streak. This is climactic behavior and will likely not continue.
- The bulls do not mind a bear close as long as it stays above the January 17th breakout point. The bulls want a measured move up from December 2022 low and the January 17th breakout point, which would project up to around the 4,270 price level.
- The bears want the current rally to form a wedge top with January 17th, January 23rd, and January 27th. While the shape of the wedge is not great, it is still three pushes up since January 17th, which means traders will sell betting on two legs down.
- The bears want to prevent the market from going above the December 13th lower high. The bulls will argue that December 13th is a major lower high, and as long as the market stays below it, it is in a bull trend.
- The bulls see the December 13th lower high as failing to lead to a new low and want an upside breakout of the December 13th lower high.
- If the bulls can get above the December 13th lower high, they can argue that the market is in a bull trend and making higher lows and higher highs.
- While the bulls have done an excellent job getting six consecutive bull trend bars, the bodies overlap, which is a sign of trading range price action.
- Since the market is in a trading range, the bulls will probably become disappointed this week.
- Overall, traders should expect a bear close today or tomorrow to end the consecutive bull closes on the daily chart.
Emini 5-minute chart and what to expect today
- Emini is down 30 points in the overnight Globex session.
- The Globex market has continued down in a tight bear channel since last Friday’s late selloff into the close.
- The bears want today to gap down and form a bear trend from the open.
- The bears want the day to close below the day’s open, which would end the six days of consecutive bull closes on the daily chart.
- As always, traders should expect the first 6-12 bars of the U.S. session to have a lot of trading range price action. This means that most traders should wait for 6-12 bars unless they are comfortable trading with limit orders and betting on failed breakouts.
- Traders can also wait for a credible swing trade to set up. There is typically an 80% chance of a swing trade forming before the end of the 2nd hour from a double top/bottom or a wedge top/bottom.
- Overall, traders should pay close attention to the open of the day. If the market is above the open, traders should be mindful of a reversal to below the open of the day. Less likely, the day will close above the open of the day, which would be a 7th consecutive bull close on the daily chart.
Emini intraday market update
- To follow about bar 18…
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD has been in a bull channel for over two months. The channel up is tight, which will limit the first reversal down.
- The market has been away from the moving average for some time. This will increase the odds of a pullback to the moving average soon.
- While the channel up may continue, the market will likely transition into a trading range soon and not continue much higher.
- The weekly chart has been in a tight bear channel since mid-2021, and the rally from October 2022 was the first trendline break of the bear channel.
- The bulls will likely need a higher low major trend reversal on the weekly chart, which means the market will probably need to pull back to around the 1.05 price level before bulls view it as a credible higher low major trend reversal.
- Overall, this means that the daily chart will likely be sideways for several months.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
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.
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.
Thanks Brad for the report. I believe you have meant to say bear and not bull (last 2 words from the enclosed paragraph) “The bears want to prevent the market from going above the December 13th lower high. The bears will argue that December 13th is a major lower high, and as long as the market stays below it, it is in a bull trend”.
Good catch Eli… fixed for Brad.