Trading Update: Monday November 21, 2022
Emini pre-open market analysis
Emini daily chart
- Emini continuing sideways and stalling around the 4,000 big round number.
- The bulls see the sideways price action over the past five days as a pullback from the breakout that ended on November 11.
- At the moment, the odds still favor a second leg from the November 10 breakout; however, the longer the market goes sideways, the more the probability will become neutral.
- The bears see the November 10 breakout as a buy vacuum test of 4,000 and the third push-up creating a wedge top (October 5, November 1, and November 15).
- The bulls need to show signs of strength soon and remind traders that they are still in control. Otherwise, the market could quickly close the gap above November 1st and test the November low, the bottom of the third push-up.
- The market has obvious targets above, like the September 12 low. While the odds favor that the market will reach the September 12 low, the market may first have to test the November lows and form a double bottom major trend reversal fist.
- Overall, traders need to remember that the market is in a trading range, and 4,000 is the middle of the range. This means that overall, the directional probability of up or down is close to 50% for both the bulls and the bears.
Emini 5-minute chart and what to expect today
- Emini is down 12 points in the overnight Globex session.
- The overnight Globex session sold off, testing Friday’s lows, and has had a brief rally during the early morning session.
- As always, traders should expect a limit order open and consider not trading for the first 6-12 bars unless traders are comfortable with limit order trading.
- Traders can also wait for a credible stop entry, such as a double bottom/top or a wedge bottom/top.
- Today will likely have a lot of trading range price action. Traders should pay close attention to the open of the day, especially if the open is in the middle of the day’s range, as this will increase the odds of trading range price action.
- Lastly, traders should remember that, as Al often says, “Price is truth.” This means a trader must trade the chart in front of them, not what they hope the market will do.
Friday’s Emini setups
Al created the SP500 Emini chart.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is attempting to get a reversal up the upside breakout on November 11.
- More While the bears are trying hard to get a 5-bar bear micro channel and have today close on its low, more likely that today will disappoint the bears.
- Assuming today closes near its low, while it would be disappointing for the bears, the market would likely need one more bear bar to convince traders the market is Always In Short. Bulls will try their best to create a big tail on today’s bar.
- November 15 was a warning that bulls were scalping out and more interested in buying a pullback, which is happening right now.
- Traders need to remember that the market is in a trading range, which means the bears have a reasonable argument for a successful reversal.
- The bears want today to close on its low and to have strong follow-through selling tomorrow. Next, the bears want a test of the November 10 bottom of the breakout.
- The bears see the November 11 breakout as a second leg trap, where the first leg ended on October 27. Note you the first push-up to October 27 is a nested two-legged move (October 4 and October 27).
- Overall, traders will pay close attention to today. If today has a big tail, it will increase the odds that this is just a pullback in the bull rally.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Brad created the SP500 Emini chart.
End of day review
- End of Day video to follow.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. Al talks about the detailed S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com on trading room days. We offer a 2 day free trial.
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.
Hi Brad. How are you? I really appreciate your work and have been following your videos on youtube with attention. I would like to ask about the comment you made, “as always, traders should expect a limit order open and consider not trading for the first 6-12 bars unless traders are comfortable with limit order trading”. Could you please indicate a video or even a book chapter where Al goes deep on this topic? Thank you very much. Leonardo.
It is just something I gathered from Al by watching him in the trading room. I would hear Al say things like most traders should be patient on the open or not get trapped into a bad trade at the start of the day. Refer back to the video course “Trading the open.” Also, I developed that guideline out of the personal experience. I kept being too aggressive on the open, betting on a successful breakout and losing money. So, I learned that if I waited for about 6 bars, I usually would not miss anything.
You can do this experiment yourself though. Just take a look and see how much profit/losses do the first 6-12 bars of the day bring you.
To Clarify, I will trade during the first 6-12 bars, though. So, if the open has a breakout with good follow-through I want to find a way to enter in the direction of the breakout.