Emini bulls want to disappoint bears after yesterday’s bear breakout

Trading Update: Thursday September 22, 2022

Emini pre-open market analysis

Emini daily chart

• The Emini broke below the September 18 low by going outside down yesterday.
• The bulls will see this breakout as the third leg in a wedge bottom (8/24, 9/6), and they hope today will be a strong reversal bar closing on its high.
• The bears want follow-through today and a test down to the July 14 low and ultimately a breakout below the June 17 low. The bulls want to disappoint the bears today and create a strong bull trend bar.
• Yesterday might be enough of a surprise that traders will wonder if there needs to be a second leg down. The second leg could be one bar; however, if today is not a strong-looking bull reversal bar, traders will wonder if the market has to get a second leg down.
• The bulls have an opportunity to demonstrate strength and get a strong buy signal bar here, so traders need to pay close attention to the bulls’ resolve today.
• The bears have had three legs down in a bear channel lasting about a month; since the market is in a trading range, this increases the odds that the bears will be disappointed soon.
• The bears have an opportunity to get consecutive bear trend bars here, and if they get it, that might be enough to trap the scale in bulls who bought the breakout below the past couple of days.
• Overall, traders need to pay close attention to today and see the resolve of the bulls and bears.

Emini 5-minute chart and what to expect today

• Emini is down 3 points in the overnight Globex session.
• The Globex market has been going sideways to up and testing the close of the FOMC report bar.
• As always, traders should assume that today will open a trading range. This means traders should be patient and consider waiting for 6-12 bars before taking a trade.
• Traders can also consider waiting for a credible stop entry such as a wedge bottom/top or a double bottom/top.
• The market has the potential to be a bull trend day if the bulls can reverse yesterday’s selloff. As stated above, this would trap the bears that were sold yesterday.
• The bears want the opposite and to get a strong bear close which would trap the bulls.
• Most likely, today will be a trading range day which would disappoint both the bulls and bears after yesterday’s big bear trend bar. This would make traders question whether the bears need a second leg down.  

Yesterday’s Emini setups

Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).

My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter. These therefore are swing entries.

It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.

If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

• The EURUSD is forming an expanding triangle (blue lines) and is currently setting up a lower low major trend reversal.
• The bulls see the trading range from August 23 to September 20 as a final flag and expect a reversal up to 1.000, which is the midpoint of the trading range.
• The bulls want a strong reversal bar and consecutive strong bull trend bars, which would increase the odds of an upside breakout and test of the September 12 close.
• The bears want to trap the bulls here and get a measuring gap with the breakout below the September 6 close, however, they will probably fail, and the market will reverse back up to the 1.000 big round number.
• Traders will pay attention today to see if the bulls can get a solid reversal bar trapping the bears and making bears decide if they should exit above. Bears want to get another strong bear trend bar today or at least prevent the bulls from getting a bull close.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

End of day video review

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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Trading Room

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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.

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