Trading Update: Wednesday November 16, 2022
Emini pre-open market analysis
Emini daily chart
- The Emini closed just under the 4,000 big round number yesterday. This price level has been significant all year and will likely continue to be a substantial price level.
- The Emini may go sideways around last week’s high. Traders should be open to the possibility of the market going sideways for several bars before the bulls can get a credible second leg up after last week’s breakout.
- The bulls want the market to continue higher and test the September 12 low at a minimum and possibly the August 26 high.
- The market is beginning to form a lot of overlap, which increases the odds that the market may have to pull back soon.
- While the market is Always In Long, and the odds favor higher prices, the market is still in a trading range. This means the strong breakout last week may be a trap that will trap the bulls, causing them to buy too high in a trading range.
- While the odds favor a second leg up after last week’s bull breakout, the market may have to continue sideways before the bulls can get their second leg.
- The weekly chart had a strong close last week, and the bulls want this week to close above the high of last week, which would be a sign of strength. The bears know this, and they want the opposite. This means that the high of last week (4,009.75) is a magnet and will likely continue to be a magnet all week.
- Overall, traders should expect sideways over the next couple of days.
Emini 5-minute chart and what to expect today
- Emini is down 6 points in the overnight Globex session.
- The Globex market has been going sideways for most of the overnight session.
- As always, traders should expect a lot of trading range price action on the open. This means most traders should consider waiting for 6-12 bars before taking a trade.
- Traders can also wait for a credible top or bottom. The market will often form a double top/bottom or a wedge top/bottom that will usually lead to a credible swing trade.
- The day will likely have a lot of trading range price action, so traders should pay close attention to the open of the day.
- Overall, traders should assume the market will be a trading range until they have reason to believe otherwise, such as a credible breakout with follow-through.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD formed a High 1 buy on Monday (11/4); however, the signal bar was a doji bar. This increased the odds of sellers above the bar, which is what happened. Bulls ended up scalping out above the High 1 buy rather than holding into yesterday’s close.
- Last Thursday and Friday’s bull breakout was strong enough for the market to have a second leg up.
- While yesterday was a second leg up, it was not symmetrical with the size of the two-bar bull breakout last week. This means the odds favor a more significant second leg up after any pullback.
- The market may have to pull back for a couple of days before the bulls can get their second leg up.
- The market is still in an overall trading range. While the two-bar bull breakout last week was strong, and the odds favor a couple of legs up, traders should be open to the possibility of the bulls getting disappointment.
- The bears need to create more selling pressure before they have a reasonable argument for stopping the bulls.
- Overall, traders should expect sideways for a couple of days to relieve the bulls.
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.
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.
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.