Trading Update: Friday April 21, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini sold off late in the day yesterday, preventing the bulls from getting a bull bar closing on its high. Likely Emini continued disappointment for both bulls and bears.
- The market has had a lot of overlap since April 4th. This increases the risk that the market is evolving into a trading range.
- The 20-period Exponential Moving Average is around 4,115, close enough for the market to touch it.
- Yesterday’s close is in the middle of two important price levels, the March 22nd high and the February 2nd high.
- Typically, when the market is going sideways and in the middle of two important price levels, it is a clear sign of trading range price action.
- This means that the market is deciding on which target to test (March 22nd or February 2nd high), and traders should assume the probability is very close to neutral.
- The bulls probably still have a slight advantage since the channel up from the March low is tight. However, the probability is not 60% for the bulls.
- While the bears had done an excellent job, they have not taken control of the market. The bears have done enough to make the bull breakout up to April 4th convert into a trading range.
- The bears now need to increase the selling pressure if they are going to get a downside breakout and close below the March 22nd high.
- The reason March 22nd high is important because it is a big bear bar, and it was a possible lower high in the bear channel.
- The bears that sold the March 22nd high never got a chance to exit without a loss. Typically, when the market is in a trading range, it will allow traders who bet against breakouts (sell above bars or buy below bars) to use wide stops and scale in to make a profit or at least avoid a loss.
- Overall, traders should expect continued disappointment and confusion for the bulls and the bears. There are probably buyers below and sellers above yesterday’s bar.
Emini 5-minute chart and what to expect today
- Emini is up 1 point in the overnight Globex session.
- The Globex market has been in a trading range for the overnight session.
- At the moment, the market will probably open near yesterday’s close.
- Traders should expect a trading range open during the U.S. Session.
- As I often say, most traders should wait for 6-12 bars before placing a trade. Waiting for 6-12 bars gives a trader information on how the day will likely unfold.
- On the open, there is a 50% chance that the initial move reverses and an 80% chance that the initial move has at least a minor reversal.
- Today is Friday, so weekly support and resistance are important. The open of the week is 4,161, which will be magnet today.
- Traders should be prepared for a possible surprise breakout late in the day due to traders deciding on the close of the weekly chart.
- Lastly, traders should be open to anything. It is important to become comfortable changing your opinion about the market once you conclude your premise has changed.
Emini intraday market update
- To follow about midday…
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD will probably test the April 13th bull bar over the next couple of days.
- Although the April 13th bull close is a possible third leg up and a 2nd leg trap, it was reasonable to buy the close of the bar. Since it was reasonable to buy the April 13th close, the market will probably reach it and allow the bulls out.
- The consecutive bear bars ending on April 17th were good for the bears. However, they failed to break below the moving average. The bears were disappointed with April 18th and used the following bar (April 19th) to exit at the low bear close (April 17th).
- Overall, the market will probably have to reach the April 13th close. However, the selloff down to April 17 is enough to increase the odds that the market is in a Trading range. This means there are probably sellers above the April 14th high.
Summary of today’s S&P Emini futures 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.