Emini likely to try and rally 200 points soon

Trading Update: Friday June 17, 2022

Emini pre-open market analysis

Emini daily chart

• The Emini is likely to try and rally 200 points soon.
• Yesterday was a big outside down day and was a second leg from last week’s selloff. Now that the bulls have a second leg down.
• As strong as yesterday was, the bar had a tail below and is mostly overlapped by the prior 2-3 bars, which is a sign of trading range price action.
• The bulls may get a second entry to buy today. If so, it would increase the odds of higher prices.
• At a minimum, the market will close above 3,800 soon, around the May 20 breakout point low.
• The selloff that started on June 9 was strong enough that the odds favor more sideways than straight up.
• While the bulls may get strong consecutive trend bars soon and reverse last week’s selloff, more likely. The bulls will likely be disappointed by any rally they get.

Emini 5-minute chart and what to expect today

• Emini is up 2 points in the overnight Globex session.
• The Globex market has been trending in a weak bull channel since yesterday’s close, with late selloff.
• The bulls will want a measured move up from yesterday’s range and a test back into Wednesday’s range.
• The odds favor a trading range open; however, if the market gets strong consecutive trend bars, the odds will increase for a trend from the open.
• Most traders should wait for a strong breakout with follow-through or a credible stop entry such as a double top/bottom or wedge top/bottom.
• Today is Friday, so weekly support is important:
  •  Right now, the bears have a bear trend bar closing near its low.
  • The bulls want to put as big of a tail as possible on the bar.
  • They ultimately want to close the May 20 breakout point low (3,809.5); however, that target may be too far away.
• Lastly, traders should be mindful of a possible strong move up or down in the final 2 hours of the day because today is the last day of the week.

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 bears gave up yesterday, and bulls got a big bull trend bar.
• Yesterday was a strong enough bull breakout to increase the odds of a second leg trap and a test of the June 9 high.
• The market got close to the June 1 breakout point low yesterday and sold off just under it. The market will probably have to reach it soon.
• While yesterday has a big tail on top, the body is significant, and the bar closed above its midpoint, which is good for the bulls.
• The bulls hope they can get follow-through today, which would increase the odds of a rally up to the June high, April 21 high, and the March 31 high, which the market will likely ultimately reach.
• Bears were able to make money selling the June 15 breakout point high, which shows weakness by the bulls. That is also a sign that more trading range price action may continue.
• The bears will try their best to prevent the bulls from getting a strong follow-through bar.
• Yesterday was a strong enough bull surprise that the odds favor at least a second leg up.
• Since today is Friday, traders will pay attention to the open of the week, which is 1.0565.

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

Al created the SP500 Emini charts.

End of day summary

• Today was a parabolic wedge top that led to a trading range day.
• The open formed a parabolic wedge top that had a sharp selloff.
• The selloff was unable to break far below yesterday’s low, leading to the market reversing up 8:00 PT.
• Also, the selloff down to 7:45 was in the form of consecutive sell climaxes, which increases the odds of a couple of legs sideways to up.
• The selloff also was a 12-bar bear microchannel which is unsustainable.
• The strong two-bar bull breakout around 8:19 was enough to convince traders that a bear trend was no longer likely, and the market was either in a bull trend or a trading range.  
• Even though the bull breakout was strong, it was still within a trading range, so the probability was lower that the market would go straight up, which is why the market went sideways.
• The bulls tried to form a higher low around 9:!5, which led to a rally back to the high from the opening range.
• The market ended up going sideways to down and closing around the open of the day.
• Overall, today was a trading range day, so traders expect disappointment and are quick to take profits, which keeps the market from going that far.

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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