Trading Update: Friday March 10, 2023
Emini pre-open market analysis
Emini daily chart
- The Emini got a large outside down bar yesterday, which was a second leg down following March 7th bear breakout. The bears are hopeful yesterday is a strong enough breakout to lead to a test of last year’s close.
- Yesterday is a big enough bar that the upside will probably be limited and lead to a bad stop entry buy.
- However, just like March 7th had bad follow-through on the next bar, traders expect today to have bad follow-through.
- The bulls want the selloff from March 6th to be a 2nd leg down from March 2nd, leading to a reversal. While this is possible, the channel down over the four days is tight and will limit the upside. Also, the bulls will probably need at least a micro double bottom.
- The market looks like it wants to test last year’s close and see if more buyers or sellers are back at that price level (3,861.00).
- The market has the potential to get a measured move down from March 2 and 3rd bull breakout. The bulls should have gotten a 2nd leg up, and instead, the bears got a downside breakout. This trapped bulls who bought on March 7th, betting on a second leg up.
- Most bulls who bought the pullback (March 7th) could not exit their trade at breakeven. There were bulls giving up during yesterday’s bear breakout.
- While there will be bulls that will continue to scale in lower,
- I suspect a fair number of bulls will not be interested in buying without a 2nd leg down. This means that there is the added risk of a selloff below the December 2022 lows.
- If the odds favor a 2nd leg down after yesterday’s bar, it increases the risk of the breakout getting bigger, leading to lower prices.
- Overall, traders should expect disappointing follow-through today and for the market to get at least a small 2nd leg down before the bulls can have a credible shot at a reversal. This means that the bulls will likely need a micro double bottom.
Emini 5-minute chart and what to expect today
- Emini is down 2 points in the overnight Globex session.
- The overnight Globex session sold off until 11:00 PM PT and has been in a bull rally ever since.
- The bulls formed a large outside up bar on the 15-minute chart during the 5:30 AM PT report. The outside up bar is 20 points tall and is probably a big enough surprise to get at least a small second leg up.
- Today will probably have a lot of trading range price action and either be a bull trend or a trading range day and less likely another strong bear trend day.
- Yesterday was very climactic. There is a 50% chance that the open could have a brief selloff before the start of the two hours of sideways trading. This means there is a 75% chance of sideways trading lasting two hours, beginning before the end of the second hour.
- As I often say, most trades should wait for 6-12 bars before placing a trade.
- Also, most traders should consider waiting for a credible swing set up in the formation of a double top/bottom or a wedge top/bottom, which usually begins before the end of the second hour.
- Today is Friday, so weekly support and resistance are important. Traders should also be mindful of the increased risk of a surprise breakout up or down late in the day as traders decide on the close of the weekly chart.
Emini intraday market update
- To follow about midday…
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is trying to create a double bottom with February 27th and test the March 7th high.
- The bulls want to get above the March 7th high and end the argument of a bear trend.
- Next, the bull wants to get a strong bull breakout above the neckline (March 7th) of the double bottom for a measured move up testing the 1.0800 price level.
- The bears should not have allowed yesterday to close on its high and form a double bottom. At the moment, it looks like many bears got out above yesterday’s high, anticipating a test of the March 7th high.
- Overall, bulls want a strong follow-through bar today and a test of the March 7th high. The bears will try their best to put a tail on today’s bar and disappoint the bulls.
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
- Live stream video trial replacement of end of day review coming 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.
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.
I thought bar 21 was a good 2nd leg trap so I got out below it.
Could you explain why it’s not a good choice, please?