Trading Update: Friday March 11, 2022
Emini pre-open market analysis
Emini daily chart
- Today will be important to pay attention to the weekly chart, and open of the week. Emini bulls want close above open of week.
- The Emini formed another stop entry buy yesterday; however, it is in the middle of a tight trading range.
- Yesterday was also another failed breakout below the January low.
- The bulls hope this is another attempt at a higher low major trend reversal and a rally that will test the all-time high.
- The odds are that the market is going to go higher soon. The bears keep trying to break below the February 24 low, and they keep failing. If the bears continue to fail, eventually, the bears will give up, which could lead to an upside breakout.
- While the odds favor more up, traders do not know if the rally will lead to a strong move that tests the all-time high, or if the rally will lead to a trading range and more sideways trading around the middle of the range (more likely).
- The bulls need consecutive strong bull bars to convince traders that the market is always in long.
- Today is Friday, so that traders will pay more attention to the weekly chart.
- On the weekly chart, traders should pay close attention to the low of last week, the current bar’s midpoint, and the current week’s open.
- This week’s bar is currently above its midpoint, and the bulls will try hard to get this week to close above its open, which is around 4310 (based on June contract), so not likely but certainly possible.
- The bulls will also try hard to close above last week’s low, 4266.5.
Emini 5-minute chart and what to expect today
- Emini is up 30 points in the overnight Globex session.
- The Globex market had a strong bull breakout around 3:24 am PT and is probably strong enough for a little more up during day session.
- The bulls want to get to the open of the week and close above it, forming a more credible buy signal bar on the weekly chart.
- Traders should pay close attention to the open-of-the-week price level all day today as it will likely be a magnet.
- Overall, today is likely to gap up, so traders should be open to a bull trend day and a pullback to the moving average on the open.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bulls had a strong breakout on Wednesday that tested the bottom of the 3-month trading range (TR).
- This bull breakout is likely strong enough to keep the market in a trading range and is the potential start of a swing-up back into the 3-month TR.
- The channel down from early February is tight, so the market may have to go sideways and test the bottom of this week and form a double bottom before the market reverses up.
- The bears got a strong bear reversal bar closing on its low yesterday. While that is good for the bears, it follows a surprise bull breakout bar., which means there will probably be buyers somewhere not far below.
- Yesterday’s selloff was a 50% pullback of the 2-day bull rally, so there may be more buyers below yesterday’s low than sellers.
- March 7 was a bear bar that closed around its midpoint, so some bears would have sold the close and looked to sell higher. Those bears are disappointed by the strong reversal up this week that they may look to sell below yesterday and look to exit breakeven on the entire trade around 1.0913, so we may test that price level.
- Overall, the market had a strong selloff last week, followed by a strong reversal up two days ago, and now a strong reverse down yesterday. This increases the odds that the market will go more sideways over the next couple of days.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini charts.
End of day summary
- The bears led a bear channel that went outside down the day, causing the weekly chart to close far below its midpoint.
- The market went always in short with the four consecutive bear bars on the open.
- The bear breakout was strong enough for a second leg down, and while the pullback was deep, it was only a 50% retracement of the bear selloff, and the bull bars looked weak.
- Even though the bulls had strong-looking bull bars all day, it is important to notice that the bulls failed to get above the major lower highs. Even the rally to 11:00 PST was still below a major lower high and still in a bear trend.
- Overall, the market had a brief 4-bar breakout around the open and sideways trading up until the final hour of the day when it became sell the close, although it was not all that clear.
- The above is what makes broad channels difficult. Most of the time, the market is going sideways with trading range characteristics. However, when you see the chart at the end of the day, it is trending lower highs and lower lows.
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. I talk 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 I mention time, 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.
Referring to the $SPY… Does Al have any information on using pre market data? Without the pre market data, I felt the big bear trend bar at 7:05 PST was just buyers side stepping to allow the price to return to the bottom of a bull channel from yesterday, but when I look at the pre market data, it appears that this was just a continuation of a bear channel that began at 3:30 PST this morning.
This question comes up regularly. A trader can look at lots of charts and end up paralyzed by analysis. If there is a good setup on the Globex, there will be a good setup on the day session. In the 1st hour, they often appear to contradict, but they always are confirming on some level.
I think a trader will make more money just looking at one chart. I traded for years with a very good trader online who traded the Globex for the 1st hour of the day session, then switched to the day session. But, he only traded one at a time.
Brad, note ES contract change to June. Some weekly numbers may be a bit different