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Emini Failing to Break below June Low, Expect Rally Soon

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Trading Update: Friday September 30, 2022

Emini pre-open market analysis

Emini daily chart

  • The bears broke below the June low yesterday, however, they failed to close below it, and the market will probably reverse up, so expect rally soon.
  • The bulls see a micro wedge bottom (9/23, 9/27, 9/29) and will try for two legs up.
  • The bears are not doing what they need to, so the market will probably test higher.
  • It was reasonable for the bulls to step aside during the September 23 test of the June low; however, the longer the market goes sideways just above the June low, the more bulls will begin to buy.
  • The bears still have a tight bear channel since September 12, increasing the odds of sideways.
  • The bulls see yesterday as a second entry buy setup, and they hope that today will want today to be a big bull entry bar that would signify bears possibly giving up.
  • At the moment, the odds are the Emini will test 4,000 before it goes 400 points low down to the 2020 Pre-Pandemic high, which is around 3,330.
  • Overall, traders should expect sideways to up soon, but the bulls only have one bull bar out of the past 8 bars. The bulls are at support (June low) and need to get more signs of buying pressure before traders will be convinced the market is going higher.
  • Today is the month’s final day and the week’s end. This means traders need to consider both the weekly and monthly charts.
  • The bulls want the market to close above the open of the week and the bears to close as far on its low as possible.
  • The bulls also will try their best to get the market to close above the low of last week (3,6,55.75).

Emini 5-minute chart and what to expect today

  • Emini is down 5 points in the overnight Globex session.
  • The Globex market has been going sideways for most of the overnight session.
  • A significant report was released at 5:30am PT, and the market is still going sideways. This increases the odds of the open going sideways.
  • As always, traders should expect a trading range open and consider not trading for the first 6-12 bars. This is because there will likely be multiple failed breakouts.
  • The range of the open is often big; on a typical day, the range gets smaller. If one takes a few significant losses on the open, it can be challenging to get back to breakeven before the end of the session.
  • Also, the probabilities on the open are not what they would typically be. For example, a breakout has a greater risk of a reversal than it would typically have.
  • Traders can also consider waiting for a credible stop entry, such as a double bottom/top or a wedge bottom/top.
  • Since today is the end of the week and the month’s final day, traders must be cautious of surprise moves. The last hour or two of the day might have a big move up and down as institutions fight over the close of the monthly and weekly chart.
  • One last thing that Al always says is that it is worth noting that traders need to trade the chart in front of them and not what they hope will happen.

Yesterday’s Emini setups

Emini 5 Min: Bear Trend from Open, Trading Range. Expect rally soon.

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

EURUSD Exhaustive Selloff, Reversal Up
  • The bulls got a strong reversal two days ago; yesterday, they now have bear bar closing on its low.
  • Though the September 26 bar is a lousy signal bar, the two consecutive bull trend bars closing on their highs are enough to think the bears will probably give up soon.
  • The targets for the bulls would first be the September 20 and September 12 highs.
  • At the moment, the market is testing the September 6 breakout point. The bears want to defend the open gap hear and create a measuring gap and break below the September low.
  • However, the odds favor the September 6 breakout point gap closing soon.
  • While the bulls want the market to go straight up from here, the market may have to have after the 6-bar bear micro channel.
  • The odds favor the market going higher and the bear trend on the daily chart entering a trading range; however, traders do not know if this is the start or will the market have to test the September lows first.
  • The bulls may try to buy a 50% pullback of the past three days (including today’s range).
  • While the bears may not be eager to sell below today, if they get two legs up and a decent bear bar closing on its low, the bears will sell.
  • Traders will pay close attention today to see if the bulls can get continued follow-through today or if the bears can disappoint the bulls and get a bear body or one closing on its low.

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

Emini 5 Min: Opening Reversal, Bear Trend Day

End of day review

  • Today was an opening reversal down that led to a bear trend day.
  • The open formed a wedge top around 10:30 (central time) with consecutive buy climaxes (blue boxes).
  • The bear ended up getting an endless pullback that led to a bear breakout around 10:45 (central time). The bear breakout led to a measured move down and test of the open of the day and the bar 2 close.
  • The market formed a channel for the rest of the day.
  • The bears formed a measuring gap between 11:30 low and 13:15 high. This gap led to a measured move down and a test of the 3,600 considerable round number.
  • The bears formed a small pullback bear trend for the rest of the day, and the bears got a strong finish for the last day of the month.
  • Overall, today was a strong finish for the bears as they were able to get a close on the monthly chart below the June low.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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.

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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