Emini Bulls Want to End Bear Streak

Trading Update: Tuesday October 11, 2022

Emini pre-open market analysis

Emini daily chart

• The bears were able to get a follow-through yesterday after Friday’s big bear breakout. Bulls want to end bear streak.
• However, yesterday closed around its midpoint instead of on its low. This is a sign of weakness by the bears, and the bulls will try and end the bear streak of consecutive bear bars.
• This is a sign that the current selloff might be brief and lead to sideways.
• The bears want a breakout below the September low. They see the past three days as a three-bar bear micro channel and strong enough that there are sellers above.
• The bears still have a chance to get the downside breakout; however, if the market begins to stall here, traders will start to buy, and the market will reverse up.
• The odds still favor a trading range and sideways to up soon, unless the bears can get the downside breakout.
• If the bears get a successful breakout below the June low, the market could quickly sell off to the 2020 Pre-Pandemic high 300 points lower. While it does not seem likely, the bears have a reasonable chance of getting the downside breakout.
• Traders will pay close attention today to see if the bears can get a fourth consecutive bear bar which would be a sign of strength.
• More likely, the bears be disappointed, and today have a bull close, reminding traders that the market is in a trading range.

Emini 5-minute chart and what to expect today

• Emini is down 14 points in the overnight Globex session.
• The market sold off during the Globex session; however, it is beginning to reverse up to above the session’s midpoint.
• Today’s U.S. Session will likely have a lot of trading range price action on the open and have multiple reversals up and down.
• Most traders should consider waiting for 6-12 bars before placing a trade.
• Traders can also consider waiting for a credible stop entry, such as a double top/bottom or a wedge top/bottom.
• Traders should pay attention to the open of the day as the day will likely try and have a bull close, ending the bear streak on the daily chart.
• if the market is below the open of the day, but not far below it, traders should be open to a reversal back to the open or above it.
• Overall, traders should assume the day will have a lot of trading range price action until proven otherwise.

Yesterday’s Emini setups

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from yesterday. 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 have four consecutive bear bars, which is good. However, the bodies are getting smaller.
• The bears are testing the September 27 bad buy signal bar, which will likely act as support.
• The market is in the buy zone; however, after four consecutive bear bars, fewer bulls will be eager to buy, which means the first reversal up will likely be minor.
• The bulls see this as a higher low major trend reversal and will likely want a micro double bottom before being convinced of higher prices. Otherwise, those bulls will want to see consecutive strong bull bars before looking to buy.
• The bears will see any rally as a pullback from the four-bar bear micro channel. They expect lower prices and a test of the September low.
• Overall, the odds favor a second leg up and a test of the October 4 bull breakout bar.

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

• Today was a small pullback bull trend that led to a midday reversal down.
• The day started with a tight bear channel that formed a parabolic wedge bottom on the open that reversed up into a bull trend.
• Typically, when you get consecutive bear bars on the open, the odds are less of a bull trend lasting all day and the day forming more of a trending trading range day or the bull trend revering at some point, like what happened today.
• The rally formed consecutive buy climaxes and tested the June 17 low.  
• The bears formed a nested wedge top around bar 40, leading to an endless pullback and a downside breakout to the day’s low.
• By the close of the second big bear trend bar (11:50 PT), the market was sell the close and likely going lower.
• The market went below the early low of the day and revered up closing around the open of the day.
• Overall, today was disappointing for both the bears and the bulls. This is a sign that the daily chart is in a trading range.

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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