Trading Update: Monday October 17, 2022
Emini pre-open market analysis
Emini daily chart
- Friday was a disappointing bar and bad follow-through for the bulls. They want rally to test October 13 close.
- The bears hope that Thursday was a pullback from the breakout and test of 3,500, and they want today to trigger the short created on Friday.
- The bulls see last Friday as the pullback from last Thursday’s large bull bar.
- The bears should not have allowed last Thursday’s bar to form if this was going to be a strong breakout below the June low and 3,500.
- Last Thursday’s bull close increases the odds of going sideways to up and testing the 4,000 big round number over the next month.
- The market is likely forming too much buying pressure to continue in a clear bear trend and not evolve into a trading range soon.
- Overall, traders should expect a test of last Thursday’s bull close here in the next day or two. This is because it was a reasonable buy-the-close bar, meaning traders likely bought the close and scaled in lower. Traders should also expect bad follow-through for the bears today, and a bull close since the market is likely in a trading range.
Emini 5-minute chart and what to expect today
- Emini is up 58 points in the overnight Globex session.
- The bulls want today to gap up and test last Thursday’s bull close. They also wish today to close as a strong bull trend day, continuing the daily chart after last Thursday.
- The bears want more sellers back at last Thursday’s close and for the market to form a bear close today, creating disappointment for the bulls.
- The bears want to prevent the bulls from getting any signs of bull strength which means stopping the bulls from getting a close on the high or above the midpoint.
- The bears do not mind if the market rallies today as long as there are sellers around last Thursday’s close (3,681 area) and the market reverses down from there.
- Traders should expect a limit order market on the open and sideways. Most traders should wait for 6-12 bars before placing a trade. This will help traders not get trapped in multiple reversal attempts.
- Lastly, traders should assume the market is in a trading range until there is a clear breakout with follow-through.
- If a trader wants to wait for a credible stop entry, they can wait for a double top/bottom or a wedge top/bottom.
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The market is continuing sideways and forming a triangle.
- The bulls see the rally to October 4 as strong enough of a rally to get a test of the high close and let them buy the close bulls out at their original entry. The bears want to prevent this, trap those bulls, and force them to sell out at an earlier price.
- The bulls expect a second leg up after the rally to October 4 and a rally up to the September highs.
- The bears want a lower high and second leg down from the four-bar bear micro channel ending on October 10.
- Overall, I have said several times that the bulls will probably get a rally lasting several months and go above the September and August highs. This is because the daily chart has been in a bear channel for a year and a half. Bear channels typically evolve into trading ranges, which means the bulls should get a rally for some time which would transition the market cycle on the daily chart to a trading range.
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
- End of Day video will be released soon.
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.