Emini May Go sideways around Last Week’s High

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.

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 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 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.

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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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