Emini big selloff after CPI report

Trading Update: Tuesday September 13, 2022

Emini pre-open market analysis

Emini daily chart

• Emini big selloff after bulls got a fourth consecutive bull bar, all closing near their highs. The rally was testing the August 24 low.
• Yesterday came within one tick of the August 24 low and turned down. The market will probably have to get at least one tick above the August 24 low, so the market is probably going one tick above yesterday’s high before the market reaches a pullback.
• Whenever you have an open gap, such as August 24, in a trading range market, it will typically close, even if the breakout point gap leads to a measured move down first.
• The past four trading days are good for the bulls. However, it is climatic behavior and increases the odds of a pullback soon.
• The first reversal down will likely fail, and there will probably be buyers below.
• Over the next few days, traders should expect a pullback before the market can go much higher. However, the market is back to Always in Long, so traders should expect higher prices and trading range though, so traders should expect the bulls to be disappointed soon.
• This four-bar is good for the bulls and increases the odds of higher prices. The market is in a trading range, which means traders should expect the bulls to get disappointed soon.
• When you get a strong rally that has not broken above all the bars to the left, one has to think about the possibility of the move being a leg in what will become a trading range and not a bull trend. This makes the probability lower than it appears for the bulls.
• Overall, the bulls have done an excellent job over the past three days, and the odds favor a second leg up. Traders will pay close attention to any pullback. The bulls want any pullback to be small and for the market to test up to the August 28 high and the August 16 high.
• The bears want to make the market go sideways here and form some kind of double top. Next, the bears want to get back down below the September 2 high and close the breakout point, allowing trapped bears out of the market.

Emini 5-minute chart and what to expect today

• The CPI report was released at 5:30am PT, and now the market is down 100+ points in the Globex session. The market will gap down during the U.S. Session
• The bulls met their goal, and the market went above August 24 by several points during the Globex session.  
• While the selloff after the CPI report is disappointing, bull traders have to remember that there will probably be buyers below.
• Two support levels to pay attention to are the September 2 high and a 50% pullback of the past four days.
• Since the market is going to gap down, traders should expect a pullback to the moving average. This means traders should still expect a trading range open and limit order trading.
• In general, traders should consider waiting for 6-12 bars before placing a trade.
• Traders can also consider waiting for a double top/bottom, wedge top/bottom.
• If the day is going to be a trend day (not including the gap down), traders should expect a bear trend. Even if the market has a bear trend from the open, there is a 60% chance the day will form a trading range.

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 CPI report completely reversed the day and now it will probably close as a bear bar and disappoint the bulls.
• The bulls have a five-bull micro channel, so there are probably buyers below; however, the bulls had their chance to get a strong breakout, and now it looks like the market will continue sideways to up with the July – August trading range.
• The bears want a two-legged pullback, with August 31 being the first leg. A trading range so the more likely sideways than much lower.
• The current bar reversal down may be another test of the 1.000 big round number.
• Overall, while the market will probably get to the August 10 high within the next couple of months, traders should expect mostly sideways until there is a clear breakout.

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

• Delayed. There is an audio issues with this End of Day video, I hope to have it fixed and upload as soon as possible.

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

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.

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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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