Trading Update: Thursday June 22, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The bears are trying to form an endless pullback following the consecutive buy climaxes up to 4,500. While the bears have done a good job, they must create more selling pressure to convince traders that this is a reversal and not a bear leg in a trading range.
- Yesterday closed as another bear bar, a sign of strength by the bears. This will increase the odds that the first reversal up will fail, and the bears will get at least a small 2nd leg down.
- The June 15th low was a buy climax bar, and it will likely act as support, along with the 4,440-round number.
- It is possible that the market will have to test the low of the last leg in the rally-up. This means that one target is the June 14th or June 8th low.
- The selloff over the past couple of days has been damaging to the bull case. This increases the odds that this rally will lead to trading range price action over the next several weeks.
- Although the bears have done a good job, the selloff is likely a bear leg in a trading range, which means the market will probably get back to the 4,500-price level and relieve the trapped bulls who bought above the June 15th bull breakout.
- Overall, traders should expect sellers above yesterday’s high and a 2nd leg down for the bears. However, the bears are likely to be disappointed soon. Ultimately, the market will likely have to retest 4,500 sometime more quickly.
Emini 5-minute chart and what to expect today
- Emini is down 10 points in the overnight Globex session.
- The overnight Globex market continues to sell off in the bear channel for a couple of days. The bulls will likely get above the 3:00 AM Lower High (4,404 on a 30-minute chart).
- Bears channels typically convert into trading ranges. This means that today will probably be either a bull trend or a trading range day.
- As I often say, traders should assume that today will have a lot of trading range price action. This means most traders should wait for 6-12 bars before placing trading.
- Most traders should try and catch the opening swing that often begins before the end of the second hour. It is common for the opening swing to happen after the formation of a double top/bottom or a wedge top/bottom.
- Lastly, if a selloff on the open is not all that strong, traders should be prepared for a possible opening reversal.
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 near 4-year library of more detailed explanations of swing trade setups (see Online Course/BTC Daily Setups). Encyclopedia members get current daily charts added to Encyclopedia.
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 Bulls got a decent bull breakout yesterday for the 2nd leg up following last week’s bull breakout.
- The bulls want a breakout above the May high. However, they will likely become disappointed since the daily chart is in a trading range.
- It is unknown how many bears are waiting to sell above. When the market is in a trading range, it is important to remember that there are institutions for buying and selling.
- It is possible that the current rally is a buy vacuum test of resistance, the May high. If it is, it is possible that an overwhelming number of bears are selling, which could cause a failed breakout of the May high.
- If the bears are going to take control, they will need to show more signs of bearish strength. Until then, the bulls are in control, and the market will probably increase.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Live stream video review with Brad Wolff. Here is YouTube link for those who cannot see video popup:
Emini End of Day Video Review for Thursday June 22, 2023
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
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.
Secondly, if you’re using buy stops or sell stops, how do you know where to put them if you first need to wait for each 5 minute bar to complete?
For price action trading to work, do you always wait for 5 minute bars to complete. if not, when do you act before completion?
Hola, Peter.
Every tick of price action works.
A 5-minute chart, it is ideal for day traders since there is plenty of time to plan or manage the trades; however, price action assessment it is the same on any timeframe.
Beginner traders should wait for the close of the bar and enter with Stop Orders one tick above bull signal bars (bulls) or one tick below bear signal bars (bears). That will increase their chance of success if their context view is correct. Beginners normally do not manage their trades, they exit when their Stop Loss or Profit Targets are hit; thus, timing is crucial for beginners.
Experienced traders enter any time either with stop orders, limit orders, or at the market because they are experts at managing trades. They always exit before their Stop Loss gets hit. They might take quick profits or let them winners run. Timing is not crucial for them, position management it is (Al’s quote: 80% of the time, traders can win money buying or selling if they manage their trades correctly).
You will find all this information in detail through the course or the how to trade manual (Learn to Trade tab).
Saludos
Thanks Josep. It does seem to me that Al’s price action depends on waiting for the bars to close. Otherwise, you don’t know if its a doji or a full body bar etc. Otherwise, the price action strategy isn’t being respected. I’m mildly experienced in trading, and Im used to not waiting, but that has its own problems…more likely to go against me because the price action hasn’t played out. Also, how do you enter stops and limits if you don’t know how far the current bar is going to go. In other words, how can you enter a stop one tick above the bar if you dont know where that bar will end up? Do you get what Im asking? And yes, I agree with you that it’s often clear that you don’t have to wait for your stop to get out of the trade. It seems ridiculous to me to put a stop below the bull run if its already 3 bars into the trend. too much risk.