Trading Update: Monday September 26, 2022
Emini pre-open market analysis
Emini daily chart
- The Emini had a strong selloff over last week’s final three trading days. Last Friday tested within a few points of the June 17 low. Bounce likely after test.
- The selloff last week was strong enough that the first reversal up will probably fail, and the market will have to get below the June 17 low. However, the market may have to bounce first.
- The bulls will probably need at least a micro double bottom before they can get a credible reversal up. This means there are probably sellers above for at least a second leg down.
- The problem the bears have is that this is the third or fourth push down since the August 16 selloff, which makes it a possible wedge bottom.
- In general, consecutive sell climaxes lower the probability of another successful leg down.
- The bears ultimately want a successful breakout below the June 17 low and 400-point selloff down to the 2020 Pre-Pandemic highs.
- Overall, the market is now at the bottom of a trading range, which means bears will probably be disappointed soon. Less likely that the bears will get a successful breakout below the trading range.
Emini 5-minute chart and what to expect today
- Emini is down 8 points in the overnight Globex session.
- The Globex market has been going sideways for most of the overnight session.
- At the moment, the market will have a small gap down.
- Traders should expect a limit order open and sideways trading on the open.
- This means that most traders should wait for 6-12 bars before placing a trade and consider waiting for a credible bottom/top in the form of a double bottom/top or a wedge bottom/top.
- Traders should pay attention to the open of the day as the bears will probably be disappointed soon, which means a close above the open.
- The important thing on the open is to be patient and not rush to trade. Remember, as Al always says, “A trade is never overdue.”
- Lastly, one must trade the chart in front of them, not what they hope the market will do.
- If today is going to be a big trend day, there will be plenty of time to enter the direction of the trend. This means traders can wait for a clear breakout and follow-through, breaking above/below support/resistance before entering.
Friday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bears did a great job last week getting a breakout below the September low.
- The past four days are strong enough that the first reversal up will likely be minor and lead sideways to down.
- The risk the bears have down here is that this is late in a bear trend that will probably end soon. This means that the current selloff might be exhausted and lead to a reversal.
- The bulls will need a strong bull breakout, or a micro double bottom, before most traders are eager to buy.
- Traders should expect sideways soon as the bears will likely take profits down here.
- While this breakout may continue lower, the EURUSD will likely have to test the September 6 breakout point soon and the resolve of both the bulls and the bears.
- Lastly, investors see 1.000 as a fundamental price level. They will know any time the market is below 1.000 as a value buy and an excellent opportunity to buy the EURUSD at a cheap price. This makes me think the market will have to get back to 1.000 soon and will have a hard time getting far away from it.
- Overall, traders expect the bears to become disappointed in a day or two, bears begin to take profits, and aggressive bulls buy for a scalp.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day video review
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.
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.
EOD video review added…
If someone bought above bar 51 on Friday’s emini, is there any reason you can see to get out at the close of bar 55? Maybe I read things wrong because 51 looked to me like a possible HL MTR. I know bar 55 was a news bar (Powell started speaking at 11:00), but it seemed to have a solid close. Thank you.
51 is an HL MTR, but the problem the bulls face is that it is a 5-6 bar bear microchannel, which lowers the probability for the bulls.
Also, most Major trend reversals are not really major and usually lead to a minor move (more continued trading range price action). A trader who bought above 51 is hoping for a sudden upside breakout, and 4-5 bars overlapping traders gave up as the market went outside down or below the bear bar closing on its low.