Trading Update: Friday November 18, 2022
Emini pre-open market analysis
Emini daily chart
- The Emini gapped down yesterday, testing the November 1 breakout point, and found buyers.
- Today, the bulls want close above last week’s high, creating follow-through, and the bears want to prevent this. The bears would also like to close below the open of the week, which would disappoint the bulls.
- While it is good for the bulls that they found buyers at the November 1 breakout point, the pullback from the November 15 high has been deep and is in a three-bar bear micro channel, increasing the odds of a minor second leg down.
- The market is still Always In Long, and the odds favor higher prices, a test of the September 12 low, and a measured move up from the bull breakout of the November 1 neckline of the double bottom.
- The bears will try their best to form a lower high below the November 15 high and get a second leg down. Next, the bears will want to close the breakout point gap above the November 1 breakout point.
- Traders must continue to pay attention to the 4,000 considerable round number as it will likely continue to be an essential magnet. Part of the buying yesterday was due to bulls and bears buying confident the market would return to 4,000.
- Overall, the bulls have a High 1 buy signal bar closing on its high (yesterday). Traders will pay close attention to see what the bulls can do today. While the bulls will try their best to get a strong bull entry bar following yesterday’s buy signal, more likely, there will be something wrong with today’s close that will disappoint the bulls.
- Today is Friday, so the weekly chart is essential. The most crucial price level on the weekly chart is the open of the week and the high of last week.
Emini 5-minute chart and what to expect today
- Emini is up 33 points in the overnight Globex session.
- The Globex market has been in a small pullback bull trend for most of the overnight session.
- The bulls want to get a strong bull trend day which would create a strong entry bar for yesterday’s buy signal on the daily chart (see above).
- The bear will see the overnight Globex rally as a spike and channel and expect the channel to form a trading range going into the U.S. Session.
- The odds favor an open trading range, meaning traders should expect a limit order market and consider not taking a trade for the first 6-12 bars.
- Traders can always wait for a credible stop-entry swing trade in the form of a double top/bottom or a wedge top/bottom.
- The market is so close to 4,000 that it may be a magnet all day, so traders should pay attention to it.
- Since today is Friday, the final day of the week, traders should be open to a surprise breakout up or down late in the day, influencing the weekly chart’s close.
- Overall, traders should assume the day will be a trading range until proven otherwise.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bulls see this tight trading range as a pullback after last Thursday and Friday’s breakout, and they are probably right.
- The bears see it as a building up of selling pressure and a possible final flag after any upside breakout.
- So far, the bears have only been able to get one bear bar closing below its midpoint in the past 11 bars, which is a sign of strong buying pressure.
- At the moment, the odds favor a measured move up of last week’s consecutive bull bars and a test of the 1.0800 measured move target above.
- The bears want to prevent the measured move target from getting hit. To prevent this, the bears need to develop more selling pressure in the form of bear bars closing on their lows.
- Yesterday is a High 1 buy signal, but the bar is a bear bar closing above its midpoint. This is not an ideal signal bar for the bulls, which increases the risk that more sellers might be above the bar.
- With the strength of last Thursday and Friday’s bull breakout, some bears may hesitate to fade yesterday’s high and wait to see if more buying or sellers are above the high of November 15. This means that there might be more buyers above yesterday’s high.
- Today is Friday, so the weekly chart is essential. Last week was a strong bull breakout on the weekly chart. The bulls want this week to close above the high of last week (1.0364), and the bears want to prevent this and close under it, which would be a sign of weakness by the bulls.
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.