Emini likely to go 100 points higher and reach 3,800

Trading Update: Tuesday June 21, 2022

Emini pre-open market analysis

Emini daily chart

• The odds favor the Emini having a rally of 100 points higher and testing 3,800 over the next couple of days as the bears take partial profits and the bulls buy for scalps.
• While it is possible the market keeps going down without any pullbacks, it is not likely.
• The market will likely need to test back to the May 20 breakout point low and 3,8000 to see if there are more buyers or sellers back at this price level.
• The bears will sell pullbacks and try to continue to form lower highs and lower lows.
• Bears will see the June 2 high as a major lower high. The bears will do their best to prevent the market from going above it. As long as the market stays below the June 2 high, the bears can argue that the market is in a bear trend.
• The bulls want an upside breakout and a break above the June 2 lower high. They know that if they can get above this price level, most traders will agree that the market is either in a bull trend or a trading range and no longer a bear trend.
• The bears still have credible measured move targets below, such as the breakout below the February – March 2022 trading range, which leads to a measured move projection of around 3,570 (Note there is a smaller measured move projection of the February – March Trading that projects to 3,625).
• The other measured move target is the double top higher high at May 17 and June high. This measured move projects down to around 3,525 and 3,442, depending on which high you use for the measured move projection.
• The last target for the bears worth mentioning is the pre-pandemic (March 20220) high, which is around 3,311. While the market may get down there, it is unlikely to reach it anytime soon.
• Overall, the odds favor a bounce up to the May 20 low and a test of the June high.

Emini 5-minute chart and what to expect today

• Emini is up 50 points in the overnight Globex session.
• The market will gap up.
• The odds favor a trading range open and test of the moving average.
• Since there will be a decent size gap, the odds are that there will be a trend from the open. However, if the bulls get a trend from the open, there is a 60% probability that it will lead to a trading range.
• The bars will likely continue to be significant size. Therefore, traders need to trade small.
• If a trader has trouble on the open, they should consider waiting for 6-12 bars before trading since the odds favor sideways. This is also because 50% of the time, the initial move has a major reversal (see trading the open videos).
• Lastly, in general, there is an 80% chance that the day will have a trading range open. This means traders should consider waiting for a credible top entry such as a double bottom/top, wedge bottom/top, or a strong breakout with follow-through.

Friday’s Emini setups

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from last Friday (before Juneteenth holiday market early close 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 bulls are trying hard to create a successful Double Bottom Major Trend Reversal on May 13 and June 15.
• The bulls hope it will lead to a breakout of the June high and a measured move up above the March 31 high.
• Bears see the three-bar breakout down to June 13 as a strong enough bear breakout that will lead to a couple of legs down.
• Breakouts within trading ranges often have deep pullbacks that make traders question if the breakout is still valid, yet the market continues in the direction of the breakout, getting a couple of legs down.
• Overall, there was a big move up to the June high and a big move down to the June 15^th low. Remember that big up and big down equals confusion, and confusion is the hallmark of a trading range.
• The bulls want the three-bar bear breakout to ultimately lead to a 2^nd leg trap, and the bulls expect a test of the June 9th top of the bear breakout.
• Over the next few days, the bears need to stop the bulls from getting more big bull trend bars closing above their midpoints. These bull bars increase the buying pressure, increasing the odds of going sideways.

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

End of day summary

• Today was a bull trend from the open that formed a Trading range day.
• Typically, when you get a trend from the open, there is a 60% chance that the day will become a trading range day. Only a 20% chance the day continues as a trend or has a trend reversal.
• The bulls got consecutive bull bars on bars 1 and 2, which was enough to make the market always in long and a second leg up likely.  
• The bulls got a measured move up of the bodies of the first three bars, which ended in a wedge top around 8:15 PT.
• Since the odds favored a test of the moving average and the trend from the open was likely to transition into a trading range, it was reasonable to take profits around the 8:15 area.
• Most bulls looking to buy around 8:15 would wait for at least a couple of legs sideways to down and a test of the moving average before buying.
• The rally down to the 9:15 area was a 50% PB and consecutive wedge bottoms. At this point, the market had a big move up, followed by a big move down. Most traders would assume a trading range is forming and look to buy in the bottom one-third and sell in the top one-third and scalp.
• The market formed a triangle (blue lines) around 12:00, which led to a failed breakout of the triangle and the high of the day.
• Bulls betting on the upside breakout would quickly exit once the market started to stall back at the 8:15 high. The bulls gave up, and the bears began selling betting on a test back to the middle of the triangle.
• Overall, today was mostly a trading range day if you remove the first 3-6 bars of the day. It is important to recognize when the market is forming a trading range and be aware of the buy/sell zones of a trading range.

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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