Trading Update: Wednesday July 13, 2022
Emini pre-open market analysis
Emini daily chart
- The bulls are hopeful the market will form a double bottom higher low major trend reversal with the June 30 low.
- The bulls had a higher low major trend reversal on June 30th. However, the bulls may need a double bottom higher low major trend reversal. This means that the higher low starting on June 30 may have been minor (not enough bars).
- The daily chart has been in a tight trading range since late June and might be forming a triangle which is a breakout mode pattern.
- The market is becoming neutral, which means most traders are better off waiting for a breakout up or down and assessing the strength/weakness of the breakout.
- The bears hope the rally up to the July 8th high is a double top with June 28 high, which will lead to a bear breakout below the June 30 low and measured move down.
- Overall, traders should expect continued sideways trading as the market decides on an upside or downside breakout.
Emini 5-minute chart and what to expect today
- Emini is down 45 points in the overnight Globex session.
- The Globex market had a big selloff during the 5:30 PT report, which means the market will gap down on the open.
- Traders should expect sideways to the moving average. However, a gap increases the odds of a trend from the open.
- If there is a trend from the open traders, the odds fill favor it, forming a trading range day.
- As always, traders should expect a trading range open which means a limit order market.
- In general, traders should consider waiting for 6-12 bars before placing a trade. They can also look for stop entry such as a double bottom/top, wedge bottom/top, or a breakout with follow-through.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD tested the 1.0000 big round number yesterday and is begging to reverse up today.
- The odds favor a bounce over the next couple of days.
- The bears have a 12-bar bear micro channel which increases the odds of the first reversal up being minor.
- The micro channel down was a sell the close market; however, when you get a bull bar like July 8th, it is usually a sign that the market may reverse up soon. Because of this and the market testing 1.0000 big round number, the market will likely have a bounce as bears take profits and bulls buy for a scalp.
- One thing to note is that the market did not go below 1.0000 big round number and tested it to the pip. While this may be low, I do not think it will be. Any reversal up might be similar to the May 13 rally where the reversed up from just above the 2017 low but eventually had to go below it, so I think the market will have to fall below 1.0000 to see what it is below.
- The bulls will need to develop buying pressure to get the successful reversal up. At the moment, the bulls will probably need a micro double bottom of a strong breakout with follow-through.
- While I still think the May – June trading range will be a final flag and the market will get back to it, the bulls will need to form a major trend reversal since the selloff from June 27 lasted so many bars.
- Over the next few days, traders should expect a minor reversal up and sideways. The bears who sold the July 11 bear close were likely disappointed with yesterday’s doji follow-through bar, and those bears are buying back their shorts, which is one reason the market is bouncing this morning.
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
- Today was a double bottom that led to a spike and channel bull trend day.
- Bar 1 and 2 were big, which increased the odds of a deep pullback since most traders would not want to risk that much on the open. However, bars 1 -2 were strong enough that the odds favored a second leg up which is what happened on bar 4.
- Also, bar 4 reversed up due to bulls buying a 50% pullback of bars 1-2.
- The bears got a parabolic wedge bottom at 7:25 PT which was also a test of the open of the day, and a double bottom with bar 1.
- The market had a strong rally up to 7:45, which was a major reversal up, and the odds favored at least a couple of legs up.
- The selloff down to 8:50 was a breakout test of the 5 high breakout point. This gap closed, which increased the odds of more trading range price action following a retest of the 8:15 close.
- The market continued in a trading range for the rest of the day.
- Overall, today was a reversal up following the report at 5:30 this morning. The market closed around the midpoint of the day’s range, which is a sign of more trading range price action on the daily chart.
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.