Trading Update: Friday September 29, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini reached 4,300 and the 200-day moving average earlier this week. The bulls are begging to develop enough buying pressure to convince traders that the August 18th low will likely get tested.
- It was reasonable to buy the August 18th low and scale in lower. This means that there is likely greater than a 60% chance that the market will reach the August 18th low soon.
- some bulls bought the 4,400 big round number on September 21st, and they got trapped that day. This means that 4,400 is also a magnet.
- The bulls see the September selloff as a second leg down from a complex selloff where the first leg down ended on August 18th.
- The bears will also call this complex selloff a 2nd leg trap. The daily chart is in a large trading range. Trading Ranges are notorious for forming two and three-legged moves that reverse abruptly.
- The Bears will probably get another leg down after the September selloff. However, traders must be prepared for a surprise upside breakout and reversal. This can make it dangerous to scale into a pullback on the second leg down.
- If everyone decides that the market needs to test the August 18th low, the market can quickly get drawn up to that price level.
- Today is Friday, and the weekly chart is important. The bulls want to disappoint the bears this week and close above the week’s open. This increases the risk of another bull close on the daily chart today.
- Overall, traders will pay close attention to today’s close. The Bulls hope they will get a finish above yesterday, a close above a prior bull bar and a sign of strength.
Emini 5-minute chart and what to expect today
- The odds favor a trading range open. This means traders should consider waiting for 6 – 12 bars before placing a trade unless they are comfortable with limit order trading.
- Today is Friday, so weekly support and resistance are important. Traders should pay attention to the open of the week. The bulls want a close above the open of the week to prevent the bears from getting follow-through buying on the weekly chart.
- Since today is Friday, traders should be open for a surprise breakout late in the day as traders decide on the close of the weekly chart.
- Today is also the last trading day of the month and the end of a quarter, which increases the odds of a surprise breakout. This means that traders must be open to anything.
- Most traders should focus on catching the opening swing that often begins before the end of the second hour. It is common for the market to form a double top/bottom or a wedge top/bottom before the open swing begins.
- Traders should pay close attention to the open of the week, open of the day, as well as yesterday’s high, as they will all likely be important magnets.
- Bar 23 should not have happened, it is a surprise and will likely lead to a 2nd leg down.
- Bar 23 should have gotten a small 2nd leg up, and instead they got trapped.
Emini intraday market update
- The bears are trying to get a bear trend from the open. However, after a gap up, the odds favor the bulls getting at least a 2nd leg up.
- The market may have to test closer to yesterday’s high, making the reversal up on bar 5 lower probability and a possible minor reversal.
- As of bar 9, the odds favor a test of yesterday’s high.
- Bar 11 is probably enough to make the Always In Short, increasing the odds of a second leg down. However, the bears ideally need follow-through selling.
- The bears tried to get follow-through selling after bar 15 and failed. The bulls see a two-legged pullback to the moving average. Next, the bulls want a rally and test of the high of the day.
- The bulls tried to get a reversal up, however, the rally up to bar 17 had too much overlap and ended up reversing back down. The bears want a test of the 11 close.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD formed a strong bull reversal bar yesterday, following the recent strong breakout below the bear channel and the May 31st low.
- The bulls hope the bear will exit, leading to a strong reversal.
- While the odds favor exhaustion and a trading range forming soon, the channel down on the daily chart is forming a bear breakout on higher time frames. This increases the odds of lower prices over the next several months.
- The first target for the bulls is the September 25th high, the high of the most recent bear breakout.
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.