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.
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.
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.
Please answer Bernard’s and Martin’s question….I think you made a typo on the dates.
So we can say Spike and channel bull trend & DT formed already. Now we have a TTR on the top. So I think it is a BO mode, and the market waits for both upside or downside strength.
I agree with you Brad if it Breaks down below the number 4080 (the first pull back of spike and channel bear trend) It can move down based on the height of TR top and test numbers between 3900 & 4000 and can form wedge bull flag (PB).
As Dr. AL says, wedge bottom is bear channel and bear channel is bull flag, 75% chance of Bull BO and 25% of bear BO. However as you always mention we are in a TR. So it can break down below wedge bull flag and form measured move down based on the height of the pattern and test the major support (the beginning of the channel).
Thank you Brad
Thank you Dr. AL for sharing your knowledge with us. Literally priceless
I noticed the same wording…”The rally since the July 14 low is becoming climatic and is at resistance (June 14 high???)”. …Id appreciate if you could clarify. (The question marks after June 14 are mine). Thank you.
Morning – quick question on the climatic rally and June 14th High. Did you mean May 4th or June 2 highs, is resistance?
Yes that was a typo on my end. I meant to say the June 2nd high. It should be correct now.