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.