Emini may need correction down to 4,000 soon

Trading Update: Tuesday August 9, 2022

Emini pre-open market analysis

Emini daily chart

• The Emini went above the June 2 major high low yesterday and reversed down. Since the rally is climactic, the market may need correction down to 4,000 to find more buyers.
• Now, traders will agree that the market is either in a bull trend or a trading range and no longer in a bear trend.
• The reality is that that market is likely in a trading range and will likely go sideways between the June 2 high and the June 17 low.
• The rally since the July 14 low is becoming climatic and is at resistance (June 2nd high). This increases the odds of a pullback soon and test of the 4,0000 big round number as well as the July 22 breakout point high.
• Overall, the bulls want an upside breakout above the June 2 high. However, that is not likely at the moment. The bulls will likely be disappointed at this current price level, and the market will begin to have more trading range price action.
• The bears want a downside breakout and test of the Jun 17 low. While it is possible, that is not likely at the moment either.

Emini 5-minute chart and what to expect today

• Emini is down 18 points in the overnight Globex session.
• The bears got their second leg down and test of the lows of yesterday’s U.S. Session.
• The bears want to create a channel down after yesterday’s selloff. The market is in the middle of the trading range that began on August 4. This is a sign that today will have a lot of trading range price action.
• As always, traders should expect a trading range open today.
• Most traders should wait for 6-12 bars before placing a trade. This is because most reversals fail on the open, which means the initial breakout attempt will likely fail and try and go in the opposite direction.
• Traders can also consider waiting for a credible stop entry such as a double top/bottom, wedge top/bottom, or wait for a strong breakout with follow-through breaking out from the range.
• Overall, traders need to remember that if today is going to be a strong trend day, there will be plenty of time to enter the trend’s direction. One is better off assuming the open will have a lot of trading range price action until proven otherwise.

Yesterday’s Emini setups

Al created the SP500 Emini charts.

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 continuing in a tight trading range that has now formed a triangle.
• Right now, the probability is neutral for the breakout up or down.
• With the number of bull bars closing on their highs, the probability may favor the bull breakout slightly, but not by much.
• The market is between two important magnets, the 2017 low and the 1.0000 big round number, and is deciding which magnet to test.
• It is important to remember that the market would not be going sideways between two important magnets if the probability was not neutral. If the probability were indeed 60% for one side, the EURUSD would have a breakout in that direction.
• Overall, most traders would like to see a bear breakout test of the 1.0000 big round number and for the market to form a double bottom with July 14. If that were to happen, the bulls would have a credible bottom and a chance at getting a breakout above the neckline (August 2) of the double bottom and a measured move up to June 27.

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

Al created the SP500 Emini charts.

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

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.

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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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