Trading Update: Thursday June 30, 2022
Emini pre-open market analysis
Emini daily chart
- Emini bears got a small follow-through bar yesterday. However, the follow-through bar was a doji and a reminder that the market is likely in a trading range, with bears likely disappointment around 3,800 (midpoint of the June 27 rally).
- Bulls will try their best to form a higher low major trend reversal and test the 4,000 big round number and ultimately a test of the June major lower high.
- The bears want the market to continue to make lower highs and lower lows.
- The problem the bears have is the bulls are developing strong buying pressure, which increases the odds of the market forming a trading range. If the market continues to go sideways, especially if the bulls can form higher lows, the odds will go up for the bull breakout and test of the June high.
- Some bulls will look to buy a 50% pullback of the June 28 rally betting the market forms a second leg up.
- If the market reaches a 50% pullback of the June 28 rally, bears may begin to take profits from a 2-3 day selloff.
- Overall, the market will likely go sideways over the next couple of days as the bulls try for a second leg up and bears try for a second leg down from the June 28 bear breakout bar.
Emini 5-minute chart and what to expect today
- Emini is down 45 points in the overnight Globex session.
- Right now, the bears have had a large selloff in the overnight Globex session.
- Since the market will gap down on the open, the probability increases for a trend from the open. However, the odds still favor a trading range open. If there is going to be a trend from the open, the odds favor the downside.
- The above is a generality of when you get a large gap, though.
- At the moment, the odds favor a sideways to up day, and the bears are disappointed on the daily chart.
- Traders should pay attention to the midpoint (3,800 area) of the rally up to June 27 on the daily chart.
- Traders should expect a trading range open unless proven otherwise. If there are consecutive strong trend bars, traders can look to swing trade, assuming the context makes sense.
- Since a trading range open is likely, traders should expect lots of failed breakouts and reversals (limit order trading).
- Most traders would be better off waiting for 6-12 bars before looking to trade since the market will likely have several reversals on the open.
- A trader can also consider waiting for a stop entry such as a double bottom/top, wedge bottom/top, or a strong breakout with follow-through.
Yesterday’s Emini setups
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
- The market had a strong bear breakout bar closing near its low yesterday.
- At the moment, today is also a bear bar closing on its low, and it looks like the market will test the 2017 low.
- The bulls did an excellent job of making the pullback from the June 13 bear breakout last many bars. However, the market never went clearly always in long.
- While the bears may get a successful breakout of the June 15 low and 2017 low (blue line), the market will likely fail around those price levels and reverse up.
- Since the 2017 low is such an important price level and the market came within 20 pips of it back on June 15, the market will likely have to reach it during the current selloff. In other words, the market will probably need to fall below it to see if there are buyers or sellers.
- Although the odds favor a failed breakout of the 2017 low, the market could easily fall 50-100 pips below the 2017 low before reversing back up.
- Over the next few days, traders will pay close attention to the test of the 2017 low and June 15 low.
- If today is a big bull reversal bar, some traders will buy, but most bulls would not want to buy after the last two bear bars closing near their lows.
- This makes me think the market will go sideways for a couple of days.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini charts.
End of day summary
- Today was a bull trend reversal day that led to a trading range day.
- The bears had a selloff on the open that led to a parabolic wedge bottom and low of the day.
- The bulls had a small pullback bull trend up until around 9:30 PT, when there was an exhaustive buy climax.
- Although the rally up to 9:30 has disappointing follow-through bars (bear bars), the bears could not make money below bars which is a sign that the bulls are strong.
- After the exhaustive sell climax at 9:30, the market continued sideways and eventually tested the open.
- It is important to recognize that the bears are not making money on the rally up to 11:30 and find a way to get long.
- Today closed as a bull trend bar on the daily chart, which was disappointing for the bears and a sign that the market will likely go sideways to up soon.
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
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. Al talks about the detailed S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com on 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.
