Trading Update: Monday June 26, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini is likely to rally for a couple of days following a test of the June 14th low.
- The Emini sold off in a tight bear channel last week. This increases the odds that the first reversal will lead to a minor reversal.
- The channel up that ended on June 16th was tight. This increases the odds that the selloff down to last Friday is a minor reversal for the bulls.
- Both of the above reasons increase the odds of sideways trading over the next couple of weeks.
- The June 15th breakout bar was a climactic breakout late in the rally that began in late May. This increased the odds of a deeper pullback than what the bulls wanted.
- The bulls who bought the June 15th bull breakout and lower will probably be able to make money. In general, if you take a reasonable buy like June 15th, at least a 60% chance one can exit back at the June 15th close, with a profit on their lower entries.
- There is an 80% chance those bulls who bought the June 15th close and lower will be able to exit breakeven on the entire trade.
- The bears want the market to form an endless pullback, leading to a downside breakout. However, this is unlikely. The market will likely have to form a Major Trend Reversal if the bears take control. This means the market will probably get a couple of legs up soon and a test of the June 15th high.
Emini 5-minute chart and what to expect today
- Emini is down 4 points in the overnight Globex session.
- The overnight Globex market sold off, forming a new low in the bear channel that has gone on for several days.
- Since the market has been in a bear channel for several days, the odds are that the market will transition into a trading range soon.
- This means that today has a reasonable chance of getting a bounce or a possible strong bull rally.
- Traders should be prepared for a possible rally on the open. The rally could happen in the first few bars. The rally could happen after a brief selloff. Lastly, the rally could happen after a trading range lasting several bars.
- As I often say, traders should consider not trading for the first 6-12 bars. This is because most of the time, the open has much sideways trading.
- Most traders should try and catch the opening swing that often begins before the end of the second hour. Because of the reasons mentioned above, traders should be prepared for a possible buy setup for a swing trade.
- Lastly, traders must be open to anything. Just because the odds favor a bounce lasting a couple of days does not mean that that exact opposite will not happen.
Emini intraday market update
- The Emini rallied on the open for the first 3 bars and went sideways until bar 12.
- The bears got a reversal down on bars 13 and 14, marking the market always in short.
- As of bar 45 (10:15 AM PT), the market has been in a broad bear channel. This channel is likely to evolve into a trading soon which means that the market will probably try and get a rally lasting a couple of legs.
- Going into the afternoon session, traders should be aware of the day’s open as it will likely continue to be a magnet.
- Low probability that the market continues to channel down for the rest of the day.
- Bar 60-63 strong enough breakout for a possible measured move up of the bull bodies projecting around 4,394
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD formed a big bear breakout within an overall trading range last Friday.
- This allowed bears who sold during the June 15th bull breakout to make money, a sign of trading range price action.
- Last Friday’s selloff was large enough to increase the odds of a second leg down. However, the rally up to the June 22nd high is in a tight bull channel, which increases the odds of a trading range forming.
- Overall, traders should suspect sideways trading over the next few weeks as the bear tries for a second leg down and the bulls scale in lower, hoping for higher prices.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Live stream video review with Brad Wolff. Here is YouTube link for those who cannot see video popup:
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.