Emini May Go Sideways before Bears Get 2nd Leg Down

Trading Update: Friday March 24, 2023

S&P Emini pre-open market analysis

Emini daily chart

• Emini may go sideways today after market rallied yesterday for the first couple of hours and then sold off in a strong small, pullback bear trend for the rest of the day.
• On the daily chart, the bulls used yesterday morning’s rally to sell out of longs at a higher price. The bears knew the odds favored a 2^nd leg down after Wednesday’s outside down bar, so they also sold.
• There were trapped buy the close bulls who bought the breakout on March 21^st, and they used yesterday’s rally to exit longs back at the March 21^st bull close.
• While yesterday is a follow-through for the bears, it is more of a trading range bar, a reminder that the bear case is not as strong as it could be.
• The bears still expect a 2^nd leg down from the March 22^nd outside down bar.
• The bulls know that the bears will likely get at least a small 2^nd leg down, and they do not mind it as long as the market forms some kind of higher low and least to an upside breakout above the March 22^nd high.
• For the bulls to set up a reasonable buy, they will likely need some micro double bottom at a minimum to convince traders to buy.
• Overall, traders should expect the first reversal up to fail and lead to sideways trading and the bears to get a small 2^nd leg down. However, the market may have to go sideways for a couple of days first before the bears can get their 2^nd leg down.

Emini 5-minute chart and what to expect today

• Emini is down 22 points in the overnight Globex session.
• The overnight Globex session has been in a bear trend since the early morning hours.
• The bears want the market to have a follow-through today and close below the past two days.
• Today will gap down, which means traders should expect at least a small 2^nd leg down on the open.
• However, traders should also expect to enter an early trading range and go sideways to the moving average.
• Most traders should wait for a swing trade to set up, that usually forms before the end of the 2^nd hour. The swing trade usually begins after the formation of a double top/bottom or a wedge top/bottom.
• Today is Friday, so weekly support and resistance are essential. This means that traders should be prepared for a surprise breakout late in the day as the market decides on the close of the weekly chart.

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 near 4-year library of more detailed explanations of swing trade setups (see Online Course/BTC Daily Setups). Encyclopedia members get current daily charts added to Encyclopedia.

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 sold off after testing the February 2^nd low. February 2^nd was a stop entry sell, and bulls got trapped buying the bear’s low. This meant that both bulls and bears would likely be selling and retest of the February 2^nd low.
• Today is the entry bar for yesterday’s stop entry short. The size of today is a little bit of a surprise, which will increase the odds of a small 2^nd leg down. However, the problem the bears have is that the bulls have a 6-bar bull micro channel. This will probably limit the downside.
• Overall, traders will pay close attention to today to see if it will close on or near its low.  If it does close on its low, that will increase the odds of sellers above for a small 2^nd leg down. If today has a big tail, that will lower the probability of the bears getting a 2^nd leg down.

Summary of today’s S&P Emini futures price action

Al created the SP500 Emini charts.

End of day review

• Live stream video trial replacement of end of day review coming soon.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

---

Trading Room

Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room days. We offer a 2 day free trial.

---

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.

---