Trading Update: Wednesday November 23, 2022
Emini pre-open market analysis
Emini daily chart
- The bulls did an excellent job getting back to 4,000 yesterday.
- With today being an FOMC day, traders should be open to anything.
- The bulls want strong follow-through after today’s FOMC release.
- While the rally yesterday was good for the bulls, traders have to be open to this just being a sell vacuum test of 4,000.
- The bulls still have the November 1 measuring gap open, which increases the odds of higher prices and a test of the September 12 low.
- The bulls need to continue to show signs of strength here. The bulls were able to get a strong close yesterday, and they need to do the same today.
- The bears see yesterday as a buy vacuum test of support 4,000, and they will try their best to reverse the market today.
- Overall, traders will pay close attention to see if the bulls can get a follow-through after yesterday’s strong bull close. Since the market is in a tight trading range, within an extensive trading range, traders should expect today to be disappointing for the bulls.
Emini 5-minute chart and what to expect today
- Emini is down 2 points in the overnight Globex session.
- Yesterday was one of those rare moments that did not have one close below the moving average all day.
- This is climactic behavior and increases the odds of the market going sideways today.
- Today is an FOMC day which increases the risk of volatility and a sharp move up or down.
- Traders should expect a trading range open with limit order trading. This means most traders should consider stepping aside for the first 6-12 bars and waiting.
- Traders can also wait for a credible double bottom/top or a wedge bottom/top on the open.
- Since today is an FOMC day, most traders should consider going flat at least an hour before the report is released at 11 AM PT.
- Once the FOMC report is released, traders should wait at least 10 minutes after the report before placing a trade.
- The FOMC can entirely change the day’s appearance, and it can have very sharp reversals. The risk is often much bigger during the FOMC release, so traders need to use caution and consider using a 20% position size compared to their normal size.
Yesterday’s Emini setups (Delayed until later today).
Brad created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bulls are trying hard to get trend resumption up and a failed bear breakout.
- The bears want yesterday to be a pullback from the 5-bar bar bear micro channel. Next, the bears want a downside breakout and test of the November 10 bull breakout.
- At the moment, the odds favor trend resumption up. While the bears have done an excellent job achieving increased selling pressure, they still have not done enough compared to the bull breakout on November 10 and 11.
- Traders will pay close attention today to see if the bulls can get a strong entry bar following yesterday’s buy signal bar. If the bulls can create a strong bull close, it will increase the odds of going sideways to up. If today’s close is weak, the odds will favor at least a small second leg down.
- The bears should not have allowed yesterday’s bar to close as it did. This tells traders that the bears probably needed one more bear bar, and they failed, which means the market is likely going higher.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Brad created the SP500 Emini charts.
End of day review
- Chart is delayed. I will post it as soon as I can.
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.
on situation like b28-b29 today, do you always expect a second leg down even if b30 almost tested the LoD? I’m asking because I was afraid of Sell vacuum test of LoD and then reversal.
And, once b28 closes, is it correct to STC or with a stop below?Or is it better to wait for the FT bar (even if b29 was then very close to LoD)?
I expected bars 28 and 29 to be strong enough for a second leg down. While it’s possible it was a 2nd leg trap and sell vacuum test of the low of the day, bar 28 and 29 were just too strong. The key is to trade small and at least enter a small position size at the market on the close of 28 or 29.
I thought 28 was a sell-the-close bar. My logic was that 28 was such a strong bar that even if 29 were a bull bar closing on its high, traders would expect a second leg down. When I see a close like 28, I often ask myself, ” What would it take for me to buy and bet on the reversal of 28 (during bar 29)?”. If I am willing to go long if 29 is a bull bar, I need to find a way to get sorted since I think the market is going lower. The easiest way to do that is to sell the close of bar 28.
Hello! How are you? I would like to ask a question, maybe a simple one. The recomendation about step aside for the first 6-12 bars applies to all days or is related to the price action of the recent days only? Thanks in advance, Leonardo.
Yes, it applies to all days. In general, most days open with a limit order market, meaning most moves fail. I say 6-12 bars as a general guideline. The point is that most of the time, traders should expect the market to go sideways on the open until there is a clear breakout.