Emini likely to reach June high today

Trading Update: Monday August 8, 2022

Emini pre-open market analysis

Emini daily chart

• Emini likely to reach the June 2 high today, and go at least one point above it.
• June 2 is a major lower high, and if the bulls go above it, they can argue that the market is either in a bull trend or a trading range, and no longer a bear trend.
• At the moment, the odds are the market is in a trading range. While the bulls may get a strong upside breakout above the June 2 high, more likely, the bulls will be disappointed soon, and the market will go sideways.
• The bears want the market to form a double top with the June 2 high, break below the June 16 neckline, and sell off for 500 points to 3,100, which is unlikely to happen.
• Bulls want the exact opposite. They want a breakout above the June 2 high and a 500-point rally above the March 29 high.
• More likely, the market will disappoint both bulls and bears and go sideways.
• The bulls are beginning to form a wedge top with the August rally. This means the market will probably have to pull back soon.
• Overall, traders will pay close attention to any breakout above the June 2nd high.

Emini 5-minute chart and what to expect today

• Emini is up 28 points in the overnight Globex session.
• The Globex market got a bull breakout of a higher time frame triangle from Friday’s triangle.
• The bulls want today to gap up on the U.S. Session and have a bull trend day.
• More likely, the market will have a sideways open.
• As always, most traders should wait for 6-12 bars before placing a trade since the open usually has multiple reversals.
• Traders can also consider waiting for a credible top or bottom. For example, they can wait for double top/bottom and wedge top/bottom before placing a stop entry trade.
• Some traders will wait for a strong breakout with follow-through breaking out above/below the initial range.
• The June 2 high will be an essential magnet, and the market will likely have to reach it at some point today.
• The most important thing to remember is to trade the market in front of you and not what you hope the market will do. If the market is in a trading range, expect breakouts to fail. If the market is clearly in a trend, assume the reversal attempts will fail.
• One last thing to mention is that the June 2 high (4,178.75) is a magnet on a higher time frame. This means if the market goes above today, it may not go far above it and have a deeper pullback, breaking above the June 2 high later today. A similar example would be August 1 going above the July high (prior day). August 1 got close to the July high and had a deep pullback before breaking above the July high.

Friday’s Emini setups

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from Friday. 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 EURUSD has continued to go sideways in a tight trading range which is now a triangle.
• There will likely be a breakout soon, but the direction is unclear. The bulls are getting strong bull bars closing on their highs. However, there have only been two closes above the moving average in over 20 bars which is a sign of strength by the bears.
• The range is tight, so most traders should wait to see the breakout and follow-through before deciding on a direction.
• The market is between two important magnets, the 2017 low and the 1.0000 big round number. This also indicates that the market is neutral and deciding which target to test.
• It would be better for the bulls if the market tested down first to the 1.0000 big round number before testing the 2017 low. That would create a double bottom with the July 14 low, and give the bulls a better opportunity to break above the August 2nd neckline of the double bottom (July 14), and get a measured move up testing the June 24 high.
• Ultimately, the market will probably get back to the middle of the May to June trading range, since the bear breakout below in July was a likely final flag setup.
• Currently, traders should patiently wait for the breakout. While it is possible this tight trading range can go sideways for another 12 bars, it is unlikely.

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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