Trading Update: Thursday November 2, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed an upside breakout on the daily chart after yesterday’s FOMC release.
- The bulls see the three consecutive bull bars as being strong enough for a second leg up on the daily chart.
- Traders will pay close attention to today’s follow-through bar. The bulls are hopeful that the bulls will get another consecutive strong trend bar, which would increase the strength of the bull breakout.
- There are trapped bulls who bought the breakout that led to the October high and are currently trapped in a losing position. Those weighing the strength of the recent breakout and deciding what to do. Instead of getting out breakeven at their first entry or on the entire trade, those bulls may look to hold their positions for a second leg up and test the October high.
- There bears are hopeful that the current rally will form a lower high and lead to a new low. While this is possible, the odds favor two legs up and a test of the October high.
- The market formed a wedge bottom with August 18th, October 3rd, and the Octobe 27th low. This was also a bear breakout below the bear trend channel line that can be drawn from the same days mentioned above.
- When the market forms a wedge, especially when it breaks below a bear trend channel line, it will often reverse up and test the top of the bear trend line at a minimum. Traders will also expect a second leg up after any reversal down.
- The reversal up on the daily chart is strong enough that traders will expect two legs up and a test of the October high.
Emini 5-minute chart and what to expect today
- Emini is up 40 points in the overnight Globex session.
- The Emini formed a strong upside breakout during the early morning hours.
- The bulls want today to form a large gap up and close as a strong follow-through bar on the daily chart.
- The bears will try their best to disappoint the bulls during today’s session.
- As always traders should assume that today will have a lot of trading range price action on the open. This means that traders should consider not trading for the first 6-12 bars unless they can trade with limit orders and make quick decisions.
- Most traders should try and catch the opening swing that often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
- Traders should be open to the possibility of follow-through buying on the open due to the gap up. However, the upside will probably be limited if there is a follow-through buying.
Emini intraday market update
- The Emini formed a tight trading range on the open, which was a breakout mode pattern.
- The bulls got the upside breakout during bar 10, which led to a strong spike and channel bull trend day.
- The bears are hopeful that today will close on its high. More likely, the market will begin to test prior higher lows in the channel, which will create a tail on the daily chart.
- The bears will try their best to get down to the midpoint of the day’s range. However, in order to do that, they need to get a strong breakout below the moving average.
- Until the bears get a strong downside breakout, traders will assume that sideways is most likely.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is going sideways in an overall tight trading range that has lasted for the past several weeks. This is a breakout mode pattern and traders should assume that the probability is close to 50% for both the bulls and bears.
- Until one side gets a breakout up or down, the odds will favor more trading range price action to continue.
- The bulls are hopeful that the market will form a higher low major trend reversal with the October 13th low. Next, they want a strong upside breakout and a measured move of the October trading range.
- The bears want a downside breakout and a test of the October low.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.
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.