Trading Update: Friday September 23, 2022
Emini pre-open market analysis
Emini daily chart
- The bears are getting very close to June low and may have to get down to it.
- The bulls had a strong rally up to September 12. However, the bears got a strong reversal down, trapping the bulls.
- While the bears have been unable to get consecutive strong bear bars, the channel down from September 13th has been tight. This increases the odds that the first reversal down will fail.
- It is possible that this selloff is just a sell vacuum test of the Jun 17 low, and buyers are waiting at this price level.
- If traders believe the market is in a trading range, they will expect the market to fall further than what seems reasonable and go sideways, so this selloff might be bulls stepping aside and bears selling aggressively to the magnet, the July 14 low or the June 17 low.
- The bears want a strong breakout below the June low and a 400 points selloff down to the 2020 pre-pandemic highs. At the moment, it is not likely, but the strong this selloff becomes, the more the bears have a chance at getting there.
- The bulls will begin to buy near the September low, betting on a failed breakout. Some will wait for a micro double bottom first.
- The bulls will also argue that the market is still forming a wedge (8/24 and 9/6), and they will try and get two legs up.
- Today is Friday, so the weekly chart is important. At the moment, this week’s bar is closing on its low. The bulls want to create a tail on the week, and the bears want the week to close on its low.
Emini 5-minute chart and what to expect today
- The bears got a selloff during the Globex session, and now the market is down 40 points.
- Today will have a decent size gap down.
- Traders should expect a limit order open sideways to the moving average. However, with the gap down being big, traders may look to sell as the market gets close to the moving average. Therefore, the market might go sideways for 6-12 bars and get a couple of legs down.
- The bulls want the opposite and trend from the open bull trend. Traders will be open to that possibility and watch for any strong bull closes as signs of buying pressure.
- Traders should consider not trading the first 6-12 bars as the market will probably go sideways.
- Traders can wait for a credible stop entry like a double top/bottom or a wedge top/bottom.
- Today is Friday, so the weekly chart is important. As stated above, the bears want a strong bear close, and the bulls want a strong reversal up. Traders need to remember that Fridays can get big moves late in the day as institutions decide to close the weekly chart.
- Overall, traders should assume today will be a trading range until proven otherwise.
- Lastly, remember that there are 81 bars on a 5-minute chart. This means there is much opportunity to make money if one is patient. It is essential to learn to be okay and let things go if they do not look right. The most important thing on the open is to be careful and not be too aggressive. The open often has multiple reversals, and it is easy to get caught in a bad trade and take a significant loss.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bears got a doji bear close yesterday, which is the minimum follow-though needed.
- At the moment, today is a bear breakout bar and a continuation of the bear breakout from two days ago.
- Some traders will argue that because yesterday was a doji bar, it is a pullback from the breakout on a smaller time frame; therefore, today might be the second leg down of the breakout.
- So far, this is good for the bears. However, the bears have an issue: the market is in a broad bear channel, and the bulls are making money at new lows. This increases the odds that the bulls will make money down here.
- More likely, the bears will take profits soon, and aggressive bulls will begin to buy.
- Traders want to see the resolve of the bears today. Will, the bears be able to close today’s bar on its low, will today disappoint the bears and be a reversal bar?
- The market is also at 0.9800, and buyers will be here simply because they see the market at a discount. Those investors will buy simply because it is a value play.
- The bears selling here hope this bear channel will continue lower. The bears want a successful bear breakout of a bear channel; however only a 25% chance they will be successful.
- More likely, the daily chart will begin to rally and test prior lower highs soon.
- Overall, traders will pay attention to today to see if the bulls can get a strong reversal up or if the bears can get a strong close.
- Today is Friday, so the weekly chart is important. At the moment, the weekly chart is at a low. The bulls want to reverse the market up as much as possible before the close, and the bears want to hold the price down here to get the low close on the weekly chart.
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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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.