Trading Update: Tuesday November 7, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini has formed a seven-bar bull microchannel. This is a strong enough breakout for traders to expect a 2nd leg up and the market to get above the October 17th high. However, as strong as the breakout is, the market is still within a trading range. This means a pullback is likely.
- The market is still within a larger trading range; therefore, the pullback of the rally from the October 27th low to yesterday’s high could reach a 50% pullback (4,257).
- some bears sold the third leg down to the October 27th low and got trapped on the reversal up. While some bears got out and took the loss on the way up, other bears scaled in higher and they will likely look to get out on any pullback.
- The bulls know that the bears are trapped and will use any pullback to add to their positions.
- Trading ranges are often forgiving to traders who scale in. This means the market may pull back to the 50% price level mentioned above to allow the bears to exit near breakeven or with a small loss.
- The bulls want to prevent a deep pullback and continue the rally higher. This will squeeze the scale in bears and force them to buy back shorts, adding to the buying pressure. There would also be trapped bulls who missed getting long hoping to be able to enter on a pullback. Those bulls will also get long, adding to the buying pressure.
- Overall, traders will expect a pullback soon lasting 1-3 days.
Emini 5-minute chart and what to expect today
- Emini is down 1 points in the overnight Globex session.
- The Globex market recently tested yesterday’s low during the early morning hours. The bulls want the market to form a double bottom and rally above the November 4th high.
- If the market reaches the November 4th high, there will probably be sellers not far above, and the trading range price action will continue.
- The bulls want a strong upside breakout today and a close above the November 4th high.
- As always, traders should expect trading range price action on the open and consider not trading for the first 6-12 bars on the open.
Emini intraday market update
- The Emini sold off on bar 1 and rallied after forming an opening reversal to the upside.
- The bulls formed a strong bull breakout up to bar 17.
- As of bar 21, the day is likely to be either a bull trend or a trading range day, and not a bear trend day.
- If the bears are going to take control of the market, they will need to form a trendline break below the moving average and a retest of the highs, which would create a major trend reversal setup. Even if the bears manage to accomplish this, the odds will still favor a minor reversal into a trading range.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD formed bad follow-through after last Friday’s breakout. The odds still favor the bulls getting a second leg up.
- The bears want a second bad follow-through bar, however, even if they get it, the odds will favor buyers not far below.
- Traders will pay close attention to see how today closes. The bulls want a reversal up and for today to close as a bull bar. This would create a High 1 buy signal bar. The bears want to prevent this and for today to form a trading range bar.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.
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.