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Emini Breakout Failed to Close above Tight Trading Range

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Trading Update: Monday June 12, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini broke above last week’s tight trading range. However, the breakout failed to close above the tight trading range.
  • The bears hope this will lead to a reversed down and test of the February high and 4,300.
  • While the bulls are likely disappointed with last Friday’s bull close, the bears have yet to be able to make money selling below bars. This increases the odds that the market is in a tight bull channel, leading to higher prices.
  • The bulls still have targets above 4,400 and the August 2022 high. The market will probably reach the bull targets above. However, the daily chart is in a trading range, increasing the odds of the bulls getting trapped and the market reversing.
  • In a trading range, traders are always concerned about buying too high or selling too low.
  • The bulls are getting near the area where the bulls who bought during the August 2022 rally got trapped. This will increase the odds of sellers somewhere above and will probably limit the upside.
  • The Bears did an excellent job getting decent selling pressure last week. However, they need to do more. It would be better for the bulls to get consecutive bear trend bars closing on their lows.
  • Ultimately, the bears need a strong downside breakout with follow-through to convince traders that the bulls have lost control. Even if the bears get a strong downside breakout, it will probably lead to more trading range price action.  

Emini 5-minute chart and what to expect today

  • Emini is up 12 points in the overnight Globex session.
  • The Globex market has been driving up in a sloped channel. The overnight session has had a lot of trading range price action, increasing the odds of more trading range price action during the U.S. Session.
  • Traders should be neutral going into the U.S. Session. This will increase the odds of trading range price action on the open.
  • As I often say, most traders should assume that the open will have a lot of trading range price action. Most traders should consider not trading for the first 6-12 bars. This is because the open usually have multiple breakout attempts that are typically minor and fail.
  • There is typically a swing trade that begins before the end of the second hour after the formation of a double top/bottom or a wedge top/bottom. Most traders should try and catch the opening swing as it usually provides more than twice their risk and has a decent probability.
  • Lastly, traders should pay attention to the open of the day, especially if it is in the middle of the range. If the day is going to be a trading range, the open will likely be a magnet most of the day.

Emini intraday market update

  • The Emini went sideways for the first two hours of the day.
  • The bulls got an upside breakout during bar 24 and a test of the high of the day.
  • AS of bar 45 (10:15), the market is Always in Long. However, because of all of the trading range price action during the first 24 bars, the bulls will probably become disappointed soon.
  • The market may end up testing back to the open of the day if the bears can develop enough selling pressure.

Friday’s Emini setups

SP500-Emini-5-Min-Parabolic Wedge Top Then Trading Range

Al created the SP500 Emini charts.

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 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

EURUSD Daily: Bear Flag At Moving Average
  • The EURUSD formed a second entry short (Low 2) last Friday, following a bull breakout to the moving average.
  • The bears see Friday’s Low 2 as a bear flag, and they want today to lead to a strong entry bar for the bears.
  • Last Thursday’s bull breakout is a surprise, which increases the odds of the Low 2 bear signal bar (June 9th) becoming a trap, leading to a bull breakout.
  • The daily chart is in a trading range. Therefore, everything is a lower probability than what it appears. Typically, a second entry sell at the moving average following a tight bear channel leads to lower prices. However, in a trading range, there is an increased risk of a bull breakout of the bear flag, leading to a measured move up to around the May 9th low.
  • Overall, traders will pay close attention to what kind of entry bar forms today. At the moment, the market has triggered last Friday’s Low 2 and reversed up. This can lead to the potential of trapped bears and bulls, leading to a strong bull breakout. If the market breaks out to the upside, trapped bears will be holding onto a losing position. There will also be trapped bulls, who are trapped out of a winning trade. Both will buy to correct their mistake of being on the wrong side of the trade.

Summary of today’s S&P Emini price action

SP500 Emini 5-Min Wedge Selloff to DB Then Small Pullback Bull Trend

Al created the SP500 Emini charts.

End of day video review

Here is YouTube link if your browser blocks video popup:

Emini End of Day Video Review for Monday June 12, 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.

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