Emini Bounce Likely after Test of June 17 Low

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

Here are several reasonable stop entry setups from Friday. 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 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.

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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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