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Emini More Disappointment Likely for Bulls

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Trading Update: Friday December 2, 2022

Emini pre-open market analysis

Emini daily chart

  • Yesterday tested the September 12 low and the top of the bull trendline from March 29 to August 16 high. The bulls were disappointed with yesterday’s close and will have more disappointment likely today.
  • The bulls could not get follow-through yesterday after Wednesday’s strong FOMC breakout bar. Wednesday was so climactic that most traders initially expected the follow-through to be bad.
  • Wednesday’s bull breakout bar is still strong enough that the odds will favor a second leg up. This means most bears will step aside and wait for a double leg up or wait and see if the bears can get 2-3 consecutive bear bars closing on their lows before selling.
  • There are still targets above, and the market does not have to fail after a second leg up. The market may get up to the August 26 high before reversing down.
  • Since the market is in a trading range, the odds favor the bulls becoming disappointed soon.
  • Today is Friday, so weekly support and resistance are essential. These bulls want a solid finish to the week and the weekly chart to close on its high. The bears want to damage the bull case as much as possible and for this week’s bull bar to approach as close to its midpoint as possible.

Emini 5-minute chart and what to expect today

  • Emini is down 60 points in the overnight Globex session.
  • The market had a big bear breakout bar during this morning’s 5:30 AM PT report.
  • The market will gap down today, so traders should expect the bears to get at least a small second leg down during today’s session.
  • Traders need to be mindful that the market may have to go sideways and test the moving average before getting a breakout.
  • As always, most traders should consider waiting for 6-12 bars before placing a trade.
  • Traders can also wait for a credible double top/bottom or a wedge top/bottom before placing a trade.
  • Since today is Friday, traders need to be open to the possibility of a surprise breakout late in the day as traders fight over the close of the weekly chart.
  • Lastly, traders must remember what Al often says, “Price is Truth.” This means that a trader must not deny what is going on. They must trade the chart in front of them and not what they hope the market is doing.
  • Overall, while the odds favor a second leg down based on the bear breakout at 5:30 AM PT, the pullback might be profound, and the second leg down could be just a retest of the 5:30 AM PT Globex low.

Yesterday’s Emini setups

Emini wedge top and big outside down after buy climax, then sell climax. More disappointment likely for bulls.

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

EURUSD Daily: Bulls Second Leg up to Measured Move Target
  • The EURUSD broke above the November 15 high yesterday and is currently trying to reverse down and has today formed a bear bar closing on its low.
  • The bulls want yesterday’s breakout to be the start of the second leg up that reaches the November 10 and 11 measured move target above (1.069).
  • The bears see a wedge top and want today to be a strong bear reversal bar closing on its low.
  • While the odds favor a second leg up after yesterday’s bull breakout bar, if today is a bear reversal bar closing on its low, some bulls will exit below and wait for a couple of legs down.
  • Overall, traders will pay close attention to today’s close and see if the bears can get a strong bear reversal bar or if the bulls can prevent the bears.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

Emini bull trend from the open after big gap down and failed wedge top led to weak bull channel with trend resumption up

Al created the SP500 Emini charts.

End of day review

  • I will update at the end of the day.

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

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.

  • Brad hey, thanks for the report. I do have a question re trade management: if you haven’t bought the close/high of the 1st bar and you see bar 2 and even bar 3, would you still define the 1st bar as buy the close? If you bought the close/high of the 1st bar with a stop few ticks under and you see bar 2,3,4 – do you still let the trade work or exit and re-enter by the close of bar 8 or earlier?

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