Trading Update: Friday February 17, 2023
Emini pre-open market analysis
Emini daily chart
- The Daily chart formed a doji bar closing below the past three bull bars.
- While this is good for the bears (bears want downside breakout), a doji is a trading range bar that increases the probability of more sideways trading.
- The bears want a double top and breakout below the February 10th neckline. A measured move from the February 14th high to the February 10th low would project down to the January 25th bottom of the bull channel.
- The bulls want the past ten trading days to form a bull flag that leads to an upside breakout and a test of the August 26th top of the bear channel.
- The market is in a tight trading range, a breakout mode pattern. This means that the probabilities of a breakout are close to 50%.
- Most traders should wait to see the breakout up or down and decide on the odds of a 2nd leg.
Emini 5-minute chart and what to expect today
- Emini is down 17 points in the overnight Globex session.
- The overnight Globex market has been in a tight trading range following an early morning bear breakout.
- The bear breakout that began around 12:00 AM PT is likely exhaustion, and the odds favor that the market will rally to the high of the breakout sometime today.
- Traders should expect a lot of trading range trading this morning and likely most of the day.
- As I often say, most traders should avoid trading the first 6-12 bars as the market often forms a limit order market during this time.
- Most traders should try and catch a swing trade that usually begins before the end of the second hour.
- It is common for a swing trade to occur after forming a double top/bottom or a wedge top/bottom. This means a trader can often wait for one of these patterns to occur before placing a trade and having a decent chance of catching a swing trade.
- Today is Friday, so traders should be mindful of the possibility of a surprise breakout late in the day as traders decide on the close of the weekly chart.
Emini intraday market update
- No intraday market update Today.
Yesterday’s Emini setups
Tim created the SP500 Emini chart from Al’s provided summary & setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is breaking out below a 9-day tight trading range, following a strong three-bar breakout. While this is good for the bears, it is getting low in a likely trading range.
- The market will probably bounce soon. However, it may have to get closer to the January 6th low before the market bounces.
- The market will likely need to form a higher lower major trend reversal before the bears can argue that the market is in a bear trend.
- The bulls will try and argue that the daily chart is in a bull trend as long as the market stays above the January 6th high.
- While this is true, the odds are the market is in a trading range and will likely reach the January 6th high, even if the market forms a lower high major trend reversal first.
- Overall, traders should expect a bounce over the next couple of days and more sideways trading.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini chart
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.
Why no sell a tick below bar 5 for a scalp?
You can take the sell below 5 but it is not all that ideal. Bar 5 is better than bar 3 and bar 4, which signify climactic behavior.
Also, there were likely buyers below bar 1, and therefore, the bar 1 low is a magnet. When you get a bar like a bar 1 on the open, it will reduce the odds of a bear-trend day. Bulls will buy the selloff betting the market gets back to the bar 1 low.
Also, with yesterday’s selloff being so climactic, there was a 75% chance that the market would go sideways for two hours beginning before the end of the second hour.
Most traders would be more interested in selling closer to the moving average.