Trading Update: Tuesday June 20, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini sold off last Friday after forming a buy climax the prior day.
- The bears hope the rally was a buy climax test of the 4,500 big round number. Next, they want the market to form a strong downside breakout to cause the bulls to give up.
- While the June rally on the daily chart is climactic, the channel up is tight. Any selloff will likely be brief and lead to a trading range instead of a bear trend.
- The bears will likely need to create more selling pressure before taking control.
- Since the daily chart is in an overall trading range, and the bulls reached the August 2022 high, traders should assume they will soon become disappointed.
- While the market can go higher, it will probably begin to go sideways on the daily chart for at least a few days and try to get closer to the moving average.
- The bears want today to become a strong entry bar following last Friday’s strong bear close.
- Overall, today will probably be disappointing for both the bulls and the bears and will have a lot of trading range price action.
Emini 5-minute chart and what to expect today
- Emini is down 15 points in the overnight Globex session.
- The Globex market has gone sideways for most of the overnight session. Traders should assume that today will have a lot of trading range price action.
- As I often say, most traders should wait 6-12 bars before placing a trade on the open. This is because the open usually have many reversals, and it is easy to get trapped trading a breakout.
- There is at least an 80% chance that the opening will form a swing trade beginning before the end of the second hour. There is also a 40% chance that the opening swing will double the opening range.
- It is common for the opening swing to begin after forming a double top/bottom or a wedge top/bottom. This provides good risk/reward for a trader looking to enter on a strong entry.
- Overall, traders should assume that today will have a lot of trading range price action. This means that the day’s open will likely be an essential magnet.
- If the day begins to form strong trending bars and breakouts, traders must not be in denial of a trend forming.
Emini intraday market update
- The Emini gapped down and went sideways for the first 5 bars of the day. The bears got the downside breakout, and the market ended up getting a selloff down to bar 12.
- The bears tried to get a bear flag up to bar 29 (8:55 AM PT).
- However, the bears failed, and the market broke to the upside and tested up to the day’s high.
- The sideways trading on the open lowered the probability for the bears.
- Also, the selloff down to bar 12 was climactic, which lowered the probability as well.
- As of bar 48 (10:30 AM PT), the Bulls have done an excellent job. The bull’s problem is that the selloff down to bar 12 was big, increasing the odds of a trading range day and not a bull trend day. If it is a trading range day, the market may test down to the 33 high (9:15 AM PT).
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD had a strong upside breakout last week (June 15th), testing the May 10th low.
- The breakout is strong enough to have a 2nd leg up likely. However, the bar is big, which means it is climactic.
- The bears see the June 15th bull breakout as a buy vacuum test of resistance.
- The odds were that there would be profit-taking for a few days following the last week’s bull breakout bar before an attempt at a 2nd leg.
- The bulls want today to form a high 1 buy signal bar closing near its high. Next, they will wish to create a strong bull entry bar tomorrow, trapping the bears.
- Traders will pay close attention over the next few days to see how determined the bulls are to get follow-through. Since the market is in a trading range, traders should expect the bulls to become disappointed.
- The bears know that a 2nd leg up is likely. They will try and cause any attempt at a second leg to fail and lead to a reversal down.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Today’s End Of Day review will be presented in the Trading Room and only available to the trading room subscribers.
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.