Emini Bears Want Break below January 25 Low

Trading Update: Friday February 24, 2023

Emini pre-open market analysis

Emini daily chart

• The Emini went outside up yesterday and closed as a bear doji bar. This is disappointing for the bears and a reminder that the market is likely in a trading range. Bears want break below the January 25^th low.
• The bulls want the market to reverse up from the bull trendline (October 13^th low, December 22^nd low).
• The market is beginning to show signs of increased buying pressure at the bottom of the bull trendline. However, the channel down from the February 14^th high was a 5-bar micro channel. This will increase the market’s probability of going sideways and develop more buying pressure.
• There are still two targets below, the January 25^th bottom of the bull channel and the January 19^th bad buy signal bar high.
• The market is right at the 4,000 big round number, which may go sideways at this price level for some time. The 4,000 has been an obvious area of agreement, and the market will likely continue to oscillate around it.
• The bears have a breakout point at the February 10^th low. All breakout points are gaps, most close in a trading range. This means that the odds favor the market getting back to the February 10^th low sometime soon.
• Overall, the daily chart is forming a large triangle over the past six months and is in the middle range. Traders should expect continued sideways trading until there is a clear breakout with follow-through.

Emini 5-minute chart and what to expect today

• Emini is down 50 points in the overnight Globex session.
• The Gobex market has been in a small pullback bear trend on the 15-minute chart for most of the overnight session.
• The bears recently got a downside breakout of the bear channel on the 5:30 AM PT report.
• Traders should expect a large gap down on the open.
• Since the day will gap down, traders should expect at least an attempt at a second leg down from the gap during the day session.
• Gap open are breakouts, which means they often get an attempt at a 2^nd leg.
• Most likely, the day will go sideways on the open and get closer to the moving average on the day session chart.
• There is only a 20% chance of a bull trend from the open reversing the gap.
• Most traders should consider not trading the first 6-12 bars and assume it will have a lot of limit order trading.
• Instead, traders should consider focusing on catching the opening swing trade that usually begins before the end of the 2^nd hour. The open swing usually happens after the formation of a double top/bottom or a wedge top/bottom.
• Today is Friday, so that the weekly chart will be important, especially later in the day. Traders should remember that there is an increased risk of a surprise breakout late in the day as traders decide to close the weekly chart.
• Remember, it is common for the final 20% of the time left in a bar to do something drastic. Just like on a five-minute chart, the last minute of the bar can alter the appearance of the bar; the same goes for the final day of the week with respect to the weekly chart.

Emini intraday market update

• The Market gapped down and sold off for the first 18 bars of the day.
• The bears tried to form a small pullback bear trend. However, the bulls developed too much buying pressure, and the market rallied back to the high of the day.
• The bulls got two strong bulls close on bars 1 and 2. It was reasonable to buy the close of bar 2. Therefore, some traders would buy the close and use a wide stop. Those bulls likely bought more below a bar like 15 (7:45 AM PT) or bar 18 (8:00 AM PT). This increased the odds of a rally back to the bar 2 close.
• I am writing this on bar 30 (9:00 AM PT), and the odds are that today will remain a trading range day. The bulls want a measured move up of the opening 18 bar range, however, the range is already big and that increases the odds of more sideways.

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 EURUSD is getting near the January 6^th low and will probably get there in the next couple of days.
• The January 6^th low will likely act as support, and the market will begin to go sideways soon.
• The selloff from the February high is in a tight channel which will limit the upside.
• The bulls will need to develop more buying pressure if they are going to get a reversal up from near the January 6^th low.
• The market will likely have to fall below the 1.050 price level sometime soon. This is the minimum price level for the formation of a higher low major trend reversal on the weekly chart. The bulls have a strong trendline break on the weekly chart and need at least a 30% pullback (1.050) from the February high to convince bulls to start buying.
• Overall, traders should expect the market to test close to the January 6^th low and begin to go sideways.

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.

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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.

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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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