Trading Update: Thursday August 24, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini gapped up and rallied yesterday following a bad Low 1 short on Tuesday.
- The bulls are hopeful that today will form another strong bull trend bar. However, it is more likely that today will disappoint the bulls.
- The channel down to the August low is tight. This increases the odds that the current reversal will be minor and not lead to a bear trend.
- The bulls have done enough damage to increase the odds of buyers not far below and more sideways trading.
- The bears who sold the August low are likely disappointed by the rally over the past four days. They will probably be more interested in minimizing a loss rather than making a profit. This increases the odds of a higher low above the August 18th low and at least a small second leg up.
- While the bulls have done a good job, the market is still Always In Short, which means the odds favor more sideways to down trading.
- However, the rally over the past few days increases the odds of the market being in a trading range which means there are probably buyers below the August 18th Low scaling in lower. This will limit the number of bears willing to establish new shorts below the August 18th low, assuming the market falls below it.
Emini 5-minute chart and what to expect today
- The overnight Globex market sold off during the early morning hours. However, after the strong rally yesterday, the odds favored a trading range and not a bear trend.
- The bears are trying to halt the buying pressure and convert the market into a trading range.
- The Bulls will try to get another follow-through bar today. However, the odds favor disappointment for the bulls.
- Traders should expect a trading range open and consider not trading for the first 6-12 bar unless they are comfortable with limit orders.
- By waiting for 6-12 bars, a trader will gain certainty on the day structure and have a higher probability of catching the high or low of the day.
- Most importantly, traders should be open to anything and not be in denial of what the price action is telling them.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bears recently broke below a bear channel yesterday. However, the breakout bar reversed up, forming a bull reversal bar.
- Yesterday’s bull reversal bar is within a tight bear channel, which lowers the probability of buying above it. However, it is reasonable for the bears to exit above yesterday’s bar, betting on a test of the moving average (blue line).
- If the bulls want a higher probability, they must wait for strong follow-through buying in consecutive strong bull trend bars.
- The market found buyers below the July 6th low, which was expected. The bulls are making money with limit orders below bars, which indicates that the market is in a trading range.
- Next, traders will want to see bulls make money with stop entries, increasing the odds that the market is in a trading range.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Live stream videos to follow Monday, Wednesday and Friday (subject to change).
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.