Trading Update: Wednesday August 30, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The bulls got a strong breakout of the neckline (August 24th) of the double bottom (August 18th and 25th). The bulls hope to get a measured move up of the double bottom, which projects around the 4,585-price level.
- The Emini formed a strong rally over the past three days following the August 25th buy signal bar.
- As strong as yesterday’s breakout bar is, it is a climactic bar in a trading range. This increases the risk that today might get back follow-through and trap the bulls into a bad buy.
- While yesterday might be the start of a 2nd leg bull trap, more likely, it is a strong enough bull breakout for a second leg up.
- Traders that want a higher probability will wait to see what today’s follow-through bar looks like and look to buy as long as today is not a strong bear close.
- The bears see a buy vacuum and the start of a second leg trap, with August 24th being the first leg. They are hopeful that today is a strong bear reversal bar, which would trap the bulls into a bad buy.
- Overall, the market is Always In Long and likely to go higher for a second leg up.
Emini 5-minute chart and what to expect today
- Emini is up 3 points in the overnight Globex session.
- The overnight Globex market has gone sideways for most of the overnight session.
- Yesterday’s strong rally was climactic, increasing the odds that today will be a trading range day and not another strong bull trend bar.
- There is a 75% chance that the market will have at least two hours of sideways trading beginning before the end of the second hour.
- There is also a 50% chance of follow-through buying on the open, followed by two hours of sideways trading beginning before the end of the second hour.
- There is a 25% chance of a strong trend day up or down.
- Traders should pay close attention to the following magnets today: the open of the day and yesterday’s high and close.
- Overall, traders should assume today will have a lot of trading range price action until the market shows evidence of trending behavior.
Emini intraday market update
- The Emini rallied on the open. However, the odds were against a successful bull trend from the open.
- The market formed a parabolic wedge top at the high of bar 9, and the bears formed a strong three-bar reversal down to bar 12.
- As strong as the bear breakout to bar 12 was, it likely led to a trading range, not a bear trend.
- As of bar 33, the market has rallied back to the bar 9 low; however, the bears will probably be disappointed soon. The market is unlikely to form other strong bull trend days, especially after the large three bear bars down to bar 12.
- Traders should expect trading range price action to continue today.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is getting an upside breakout and will likely test the midpoint of the triangle (blue lines).
- The recent triangle was a likely final flag in a trading range. This means that the odds favor a test of the midpoint of this price level.
- The bulls recently formed a parabolic wedge bottom, enough for the bears to step aside.
- The rally is strong enough that the first reversal will likely fail and lead to a second leg up.
- At the moment, the bulls are getting a strong follow-through bar today. Traders will pay close attention to how strong today’s bar will be.
- Assuming today closes above its midpoint; the market is probably Always In Long. This means it is reasonable for bears to exit shorts and step aside.
- Overall, the odds favor a second leg up. Traders will pay close attention to see how determined the bulls are to close today’s bar on its high. The stronger today’s bar is, the more traders will be willing to buy today’s close for higher prices.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Here is YouTube link if video popup blocked:
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.