Emini Getting Drawn up to September 12 Low

Trading Update: Thursday December 1, 2022

Emini pre-open market analysis

Emini daily chart

• The bulls got a very strong breakout yesterday, closing far above the November 15 high. At the moment, the odds favor a second leg up.
• The market is within 10 points, with Emini getting drawn up to the September 12 low and will probably have to reach it sometime in the next couple of days.
• The September 12 low has been a strong magnet. The reason is that bulls got trapped buying the September 12 low.
• It was reasonable to buy the September 12 low since it was following four consecutive bull bars, each closing far above their midpoints. Also, the daily chart was in a trading range, which increased the odds of the market returning to the September 12 low, even if the pullback was deep.
• The bulls see yesterday’s breakout as a surprise bar and expect a second leg up. Yesterday’s breakout bar closed far above the November 15 high, which is good for the bulls.
• Traders will pay close attention to the follow-through today and tomorrow. The bulls can get strong follow-through today and test up to the August 26 or 16 high.
• The bears see yesterday’s bull breakout as a buy vacuum test of the September 12 low. They also see yesterday as the third push-up to a wedge bottom. They also see yesterday’s bull breakout as a final flag that began on November 15.
• Although the bears have a credible argument for a wedge, yesterday is a surprise breakout bar, which means the odds favor at least a second leg up. The bears will likely need at least a micro double top before traders will be willing to sell for a swing.
• Overall, traders should pay close attention to the September 12 low (4,103.75) as the market will likely reach it over the next couple of days.

Emini 5-minute chart and what to expect today

• Emini is up 10 points in the overnight Globex session.
• Yesterday ended as a strong climactic rally. This means there is a 75% chance of at least 2 hours of sideways trading beginning by the end of the second hour. There is also a 50% chance of follow-through buying on the open.
• Low probability today will be like yesterday and lead to another strong trend day.
• Traders should assume the open has a lot of trading range trading which means a limit order market. Most traders should step aside for 6-12 bars on the open and wait for a credible breakout with follow-through or a valid stop entry.
• Traders can also wait for a double top/bottom or a wedge top/bottom since most swings occur after this pattern forms.
• While yesterday was good for the bulls, the market will likely have to go sideways for several hours to cool off the exhausted bulls. This means traders should expect a lot of trading range price action and for the market to oscillate around the open of the day.
• Lastly, traders should pay close attention to the September 12 low since the market may have to reach it today or tomorrow.

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 had an outside up bar yesterday, closing about the November 29 high. This is good for the bulls. However, the bulls need follow-through today.
• Outside bars are typically trading range bars, and most of them lead to sideways price action.
• The market is still Always In Long, and the bulls still have a slight advantage in probability.
• While it would not take much for the bears to get in control, the bulls have done an excellent job demonstrating strength with bull bars closing above their midpoints.
• At the moment, the odds are that the bulls will get their measured move up of the November 10 and 11 bull breakout based on the bodies of the breakout bars.
• The bears need to continue developing more selling pressure to regain control. They can do this by making the market sideways or creating big bear trend bars close near their lows.
• The bears have a problem because the November 10 and 11 breakout bars closed above the past 60 bars.  

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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