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
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- 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
Al created the SP500 Emini charts.
End of day video review
Here is YouTube link if your browser blocks video popup:
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.