Emini racing up to April 18 low

Trading Update: Tuesday August 16, 2022

Emini pre-open market analysis

Emini daily chart

• Emini racing up to April 18 low. Bulls got a strong trend bar yesterday and are getting close to the top of the bear channel (4,350 area); the odds are the market will have to reach the bear trendline above.
• The market also has the April 18 low (4,366.5), which will likely be resistance when it gets to it. Some bulls have scaled in, and those bulls will take partial profits back at those points.
• The market has probably seen the day’s low for the rest of the year.
• If the bears make the market go sideways long enough, they could get a deep pullback, but they will unlikely drive the market back down to the June 16 low before the end of the year.
• While the rally is climactic, it is still a small pullback bull trend, and the bears have not been able to make money on stop entries since around the July 14 low.
• Bears need to make the market go sideways for several bars, or not many bears will be eager to short.
• Overall, the market has targets above the April 18 low and top of the bear trendline. The market will likely have to reach these price levels but may have to pull back first.

Emini 5-minute chart and what to expect today

• Emini is down 6 points in the overnight Globex session.
• The market has been in a tight trading range for most of the Globex session.
• As always, traders should assume the market will form a trading range open for several bars before a successful breakout up or down.
• Most traders should consider waiting for 6-12 bars before placing a trade.
• Traders can also consider waiting for a credible top/bottom such as a double top/bottom, wedge top/bottom, or waiting for a successful breakout with follow-through.
• If the day is a trading range day and the open is in the middle of the day’s range, traders will pay close attention to it, especially later in the day as bulls and bears fight over the close of the day.
• Overall, the most important thing on the open is to trade what is in front of you, not what you hope the day will do. If the day is going to be a strong trend like yesterday (bar 22 – 28), there will be plenty of time to wait and buy the breakout.

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 bulls reached the 2017 low and failed to break out above the August 2 high.
• The bears have gotten two consecutive bear bars and are testing the July 27 lows.
• While the August 10 breakout was good for the bulls, they needed a better bottom for bulls to buy for a swing.
• The market had about 20 bars from the July 14 low to the August 10 high, which increases the odds that any reversal down to the July 27 low, or the July 14 low, will lead to a Major trend reversal.
• Often, the market will try and form a major trend reversal, such as the July 27 higher low major trend reversal, and it will not have enough bars to make it credible and increases the odds of a minor reversal. Minor reversals typically lead to lets in trading ranges and not the start of new trends.
• Now, the bulls have enough bars to form a major trend reversal. However, the problem they have is the past two days are strong bear trend bars. This increases the odds of a small second leg down and sideways.
• The bulls would need a good signal bar here, ideally closer to the July 27 low, but the first reversal up may fail, so the market will likely go sideways over the next couple of days.
• The bears had a good trend bar yesterday. However, the market is in a trading range, so the follow-through today will likely disappoint the bears.
• The bears hope that the current selloff will break far below the neckline (July 14 or July 27), and the market will have a measured move down from the double top (July 20 or August 2).

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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