Trading Update: Thursday March 3, 2022
Emini pre-open market analysis
Emini daily chart
- Emini bulls triggered a H1 buy with likely second leg up, by going above Tuesday’s buy signal bar; however, it was a bear signal bar that lowered the probability for the bulls.
- The bulls still have a wedge bottom with December 3 and 24. They are hoping to get two legs up and a strong enough rally that leads to a test of the all-time high.
- The bulls want the current rally above the H1 to be the start of the second leg up.
- Traders do not know if the market will go sideways here or if the trend will resume and reach an all-time high.
- Traders also do not know if February 24 is the bottom or if the market will have to fall below it and reverse.
- The bears are hopeful that this current rally will lead to a lower high and a test below the February lows.
- There is only a 30% chance that the market breaks strongly below February 24 and reaches the pre-pandemic high in February 2020.
- The market came within 108 points of reaching the 4,000 big round number. The market may have to get there. So what is the probability? Nobody knows precisely but look to the left; the market is in a trading range on the daily chart, which means that the odds of reaching 4,000 are higher than they appear.
- Overall, traders should expect a trading range on the daily chart and for the bulls to become disappointed here soon.
Emini 5-minute chart and what to expect today
- Emini is up 40 points in the overnight Globex session.
- The overnight session has been in a 20 point trading range but had a strong breakout above yesterday’s high before today’s upcoming day session open.
- Bears will look for a failed breakout of yesterday’s high. They will look to sell a second entry or some bear breakout with follow-through back into the range.
- The bulls will want a measured move up of yesterday or overnight Globex ranges.
- Traders should look for a credible stop entry or a follow-through breakout before committing to swing trade.
- Since today’s open is likely to be a trading range, traders should avoid trading in the middle of the trading range.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bears are trying once again to break below the January lows.
- Right now, it looks like a possible endless pullback after a strong bull breakout back in early February.
- While the selloff from February to today is probably a bear leg in a trading range, traders have to question why the channel is so tight. The bears have a 9 bar bear microchannel, which is a sign of strength.
- The bulls had a chance for a bottom on February 28 and failed to trigger.
- The market is in a trading range, and the odds favor a test of the February high. Traders have to realize that the odds of a bear breakout and follow-through are very real.
- The bears need to get a strong breakout here to convince traders that we are going lower and possibly a measured move down from the three-month trading range to test the 2020 lows.
- Even if the bears get a bear breakout, the odds will favor this 3-month trading range being a final flag.
- It is possible that the market has to reach the bottom of the bear channel (around 1.1000) before reversing up.
- Overall, traders will look for a micro double bottom before looking to buy. That would be a second failed breakout below the January low.
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
- The market gapped up above yesterday’s high and formed a second entry short.
- Bar 9 tried to form a wedge bottom, but the signal bar was weak, and the bears got a bear breakout.
- The bear breakout on bars 10-11 led to consecutive sell climaxes that tested the 60 minute EMA.
- Bar 22 reversed up after consecutive buy climaxes; however, the bear channel was tight, so the odds favored a minor reversal up.
- Bears tied to get a wedge top bear flag on bar 34; however, the bulls got a bull breakout on bar 37 and a couple of legs sideways to up.
- The bears formed a double top, and on bar 64, the market began a sell the close selloff and led to a test of the low close.
- Overall, the bears had consecutive sell climaxes that led to a trading range for the rest of the day.
- Tomorrow is Friday, so that traders will pay extra attention to weekly support and resistance.
- Bulls want tomorrow to be a strong bull trend day, making the weekly bar close on its high.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. I talk 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 I mention time, 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.