Trading Update: Monday September 11, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed an inside bar with last week’s range. Traders should be open to the possibility of this week having a lot of overlap.
- The Emini broke a four-bar bear micro channel last Friday. The bears are hopeful that the first reversal of the microchannel will lead to a second leg down. However, the pullback will likely be deeper than what the bears want.
- The daily chart has been in a trading range for several months. This increases the odds of disappointment for both sides.
- The bulls want a test of the September 1st high, and the bears want a second leg down after last week’s selloff.
- Overall, the bulls will try to get more follow-through buying to disappoint the bears further. The bears want to trigger last Friday’s low 1, although, probably buyers below. Traders should expect sideways traders for the next couple of days.
Emini 5-minute chart and what to expect today
- Emini is up 25 points in the overnight Globex session.
- The overnight Globex session rallied for several hours.
- The market will likely gap up at the start of the U.S. Session.
- Traders should expect a trading range open. There is an 80% chance of the market going sideways for at least 6-12 bars on the open. This means that traders should not rush to trade the open.
- There is only a 20% chance of a trend from the open.
- It is important to be patient on the open and remember that there will be several opportunities to trade. By waiting for clarity on the open, one will have a higher probability of getting the day type correct and making money.
- It is common on the open to have several reversals. This means that limit order trading is typically more ideal on the open.
- Most traders should try and catch the opening swing that often begins before the end of the second hour. It is common for the market to form a double bottom/top or a wedge bottom/top before the swing trade begins.
- The open swing typically has at least a 40% chance of doubling the opening range, which can lead to a great risk/reward trade.
- Lastly, traders should pay attention to the open of the day and last Friday’s low/high, as these will likely act as magnets today.
Emini intraday market update
- The Emini opened with a gap up and sold off, forming a trend from the open bear trend.
- While the selloff was strong for the first half hour of the session, the first bar of the day was a bull trend bar closing at its midpoint. This increased the odds of buyers below bar 1 scaling in lower.
- While many bulls who bought the bar 1 low would likely have taken a loss during bar 2, some would hold long and scale in lower, betting the market would retest bar 1. This is important because it increased the odds of the opening selloff becoming a sell vacuum test of support instead of a bear trend from the open that would last all day.
- As of bar 50, the market will likely find resistance soon. Today is unlikely to become a bull trend day, which means that today will likely remain a trading range day for the rest of the day.
Friday’s Emini setups
Richard created the SP500 Emini chart (Al travelling). Chart time is ET+12 hours.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is getting near the May 31st low, which will likely act as support.
- The Bears have done an excellent job with the selloff. However, it is becoming climactic and forming nested wedges. This will increase the odds of a rally back to the moving average.
- The daily chart may have to reach the May 31st low before the bulls can get a rally. If the market rallies just above the May 31st low, traders will question if the May 31st low was adequately tested.
- Overall, traders should expect a trading range to develop soon, even if the EURUSD has to test May 31st before forming the trading range.
Summary of today’s S&P Emini price action
Al created the SP500 Emini chart.
End of day video review
Here is YouTube link if video popup blocked:
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.