Trading Update: Tuesday December 13, 2022
Emini pre-open market analysis
Emini daily chart
- Update after 5:30 AM PT Report Bar: The Globex Market had a 130-point breakout during Globex session going to a new high above December 1. Traders will pay attention to today’s close to see if the bulls can get a close on high or if today will be disappointing for the bulls. As surprising as today’s pre-market breakout is, bulls may use it to take profits by betting on a wedge top on the daily chart.
- The Emini is reversing up after the micro double bottom following the five-bar bear micro channel. More likely, there will be sellers above the December 6 high as traders expect a second leg down after the five-bar bear micro channel that began after the wedge top ending on November 30.
- Because of the trading range price action, some of those bears want to sell above a bar like December 6.
- The bears selling the December 6 high understand that the market may have to test higher up and are willing to scale in higher.
- The bulls want the current rally to test the December 1 low at a minimum. This is where traders got trapped buying the December 1 low. Since the December 1 low is a reasonable target, the market may have to get there, and if it does, it will likely become resistant.
- Bulls were disappointed buying the December 1 low and will likely sell out of longs. Bears know this and will also look to sell the December 1 high.
- Overall, traders should expect sideways over the next few days. However, enough of a surprise bar to lead to a second leg up; however, the rally will likely be limited.
Emini 5-minute chart and what to expect today
- Emini is up 130 points in the overnight Globex session.
- The market rallied 130 points in less than 10 minutes during the 5 AM PT report.
- The market will have a big gap up at the start of the U.S. Session.
- The surprise bar, which during the report is extremely climactic, will likely lead to profit taking and more sideways than a strong rally today.
- Traders should assume the day will have a lot of trading range price action, especially since bulls will likely use this morning’s report to take profits on the daily chart.
- The bars may be prominent today, so traders should use caution and trade small.
- As always, traders should consider waiting for 6-12 bars before placing a trade.
- Traders can also wait for a double top/bottom or a wedge top/bottom before placing a stop entry for a swing trade.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The market is in a bull channel, and the bulls are trying their best to reach the measured move target above (1.0700).
- The market is forming a triangle over the past two trading days. This increases the odds that an upside breakout will lead to a final flag.
- The bulls want the small pullback bull trend to continue and the negative gap (blue line) to lead to a measured move up. The small pullback bull trend will likely lead to a trading range, and the market will have to test down for a couple of legs.
- Price has been away from the moving average for 22 bars which is a sign of bull strength. However, it is climactic, which means the odds are that the market will have to test the moving average soon.
- The weekly chart has been in a tight bear channel since July 2021. While the rally from the October low is strong, it will likely need to a pullback and form a higher low to satisfy a retest of the lows.
- As strong as the rally has been over the past two months, it is likely minor, and traders will expect a pullback to form a higher low.
- Traders will likely want to see the pullback go below 1.0200 at a minimum to satisfy that the pullback is a possible higher low major trend reversal.
- Overall, the market will probably convert into a trading range soon, regardless of if the market has to reach the 1.0700 measured move target first.
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
- I will update at the end of the day.
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.