Emini Likely Pullback Soon and to Go Sideways

Trading Update: Tuesday November 15, 2022

Emini pre-open market analysis

Emini daily chart

• Yesterday formed a bear bar closing near its low. However, the body was small compared to the tail above the bar. This is more likely a pullback bar than the start of a successful reversal down.
• The market may likely pullback soon to go sideways for a few days to relieve the buying pressure.
• Currently, the odds still favor higher prices and a test of the September 12 low.
• The bulls want to create a gap between the November 1 high and yesterday’s low. Next, they want a measured move up from the November 3 low (or October 21) to the November 1 high, projecting up to the September 12 low.
• The bears see this rally as a potential second-leg trap, with the first leg being the rally up to November 1.
• The problem the bears face now is the lack of selling pressure. This means the bears will need to develop more signs of strength, one way to do that would be to make the market go sideways and form a micro double top.
• The rally over the past three trading days is climactic, increasing the odds that the market will have to go sideways before it can go much higher.
• Traders also need to remember that 4,000 is a very important round number, and the market may have trouble getting far away from it, increasing the odds of going sideways.

Emini 5-minute chart and what to expect today

• Emini is up 55 points in the overnight Globex session.
• At the moment, the market will have a large gap up.
• This increases the odds of an attempt at a rally forming in the first 1-2 hours of the day.
• The odds of the day being a bull trend or a trading range day increase. Less likely, the day will be a bear trend from the open day.
• The odds are against a bear trend from the open; the market could quickly form a trading range open and then form a bear trend day.
• As always, most traders should avoid trading in the first 6-12 bars of the day. The reason for this is that most of the time, the first hour has a lot of failed breakout attempts, making it a good limit order market which is not ideal for most traders.
• Traders can wait for a credible stop entry forming after a double top/bottom or a wedge top/bottom.
• Traders can also wait for strong consecutive trend bars before looking to trade in the direction of the trend, assuming the context makes sense.
• Lastly, the bulls will likely be disappointed soon. This means traders should be cautious and pay attention to the open of the day, as it will probably be a magnet all day.

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 bulls got a strong two-bar breakout last Thursday and Friday.
• The market formed a High 1 buy above yesterday’s high and is breaking out to the upside.
• Although this rally is strong, yesterday’s buy signal bar is a bear doji bar, increasing the odds that the upside will be limited before a deeper pullback.
• The bulls hope the market will reach the measured mover up of last Thursday and Friday (purple line). However, the market will probably have a deeper pullback first.
• The bears need to develop more selling pressure before they have a credible short. Currently, the market is Always In Long, and the odds favor higher prices.
• Traders will pay close attention to today. Will the bulls who bought above yesterday’s high 1 buy signal scalp out painting a big tail above, or will the bulls continue to buy into the close, causing today to close on its high.
• So far, today is a good far for the bulls. Even if the market pulls back for a couple of days, the odds will still favor a measured move up and test of 1.0700 (purple line)

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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