Trading Update: Friday March 25, 2022
Emini pre-open market analysis
Emini daily chart
- Emini bulls had a strong reversal following the L1 that was triggered on Wednesday. Bulls want strong close on weekly chart.
- The market is trying to test the February 9 high and the 4,600 considerable round number and will most likely have to reach it soon.
- The bears are hopeful that the market will form a micro double top soon and try to reverse the market and form another lower high with February 9.
- Right now, the odds favor the bulls in getting higher prices; however, if the market starts to go sideways, the probability for the bulls will quickly fall back to around 50%.
- The bears ultimately do not care if the market reverses here or back at the all-time high. They see the market as a trading range and no longer a bull trend. This means that even if the market reaches the all-time high, the bears will be eager to sell and try to form a higher high or a lower high major trend reversal and test back down to the February low.
- The bulls also got a bull breakout above the March 3 high so is a bull breakout above the neckline of a double bottom. The bulls are hopeful that the bull breakout above the neckline will reach the 4,666.25 measured move projection.
- Today is Friday, so weekly support and resistance are important, especially in the final few hours of the day.
- Right now, this week’s bar is a bull bar closing on its high. Bulls hope to keep the market around this price level and have the week finish as a strong bull bar.
- That would be two consecutive bull bars on the weekly chart, increasing the odds of higher prices.
Emini 5-minute chart and what to expect today
- Emini is up 12 points in the overnight Globex session.
- The Globex session has been in a trading range since Yesterday’s day session close.
- Traders should be open to a trading range day today, which would disappoint traders.
- Traders should expect a limit order market.
- In general, traders should only swing trade if there is a credible stop entry or a decent 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 is still deciding between a bull breakout of the bear flag or a double top selloff back to the March low.
- Currently, the market is around the midpoint of the March trading range, which means the market is in breakout mode, and the probabilities are close to 50% for both bull and bears.
- Right now, the odds favor the bulls getting their bull breakout above the bull flag (probability is not 60%, though). This is because the market broke below a bear channel, so the market will have to test the top of the bear channel.
- While the bears have a double top with March 21 being the signal bar, it is possible that those bears may give up quickly.
- The past three days have been weak follow-through for the bears, which will likely cause more and more bears to give up. This means that there is potential for a bull breakout that reaches the March 21 high in the next few trading days.
- The bears need to get a strong bear close soon to convince traders to sell more betting on the double top.
- Overall, sideways is most likely over the next few trading 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 bulls got a double bottom on the open that led to a wedge top.
- The wedge top was followed by a strong bear breakout and follow-through that led to a test of the day’s low and a beakout several points below.
- The problem the bears had was the size of the opening rally. Often when you get a reversal day, and the opening range is big, the odds will favor the reversal to lead to more trading range price action (for example, the rally from 8:00 am to 9:30.
- The bulls got an upside breakout of the bull flag around 10:00 am, leading to a high of the day.
- Overall, the market was in a trading range day with big swings up and down.
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.