Trading Update: Tuesday April 4, 2023
S&P Emini pre-open market analysis
Emini daily chart
- Yesterday was a follow-through bar, and the market reached the bear trendline (blue line). Emini risk getting big for bulls.
- At the moment, the momentum up from the March 24th low is strong enough to increase the odds of a second leg up after any pullback.
- Traders should expect the market to pull back soon for a day or two. The risk is getting big for the bulls. Therefore, traders will likely begin to take partial profits.
- The bulls want a breakout far above the February 2nd high and rally to the August 16th high.
- The bears want the rally to stall around the February high and form a double top.
- the market will probably pull back soon as bulls take partial profits.
- Traders will pay close attention to see how deep the pullback will be.
- Traders will also pay close attention to the test of the February 2nd high. If the market starts to stall and go sideways under February 2023 high, that will increase risk of the rally being a buy vacuum test of resistance (February 2023). If the market breaks beyond February 2023 high and starts to go sideways above it, that will increase the odds of higher prices.
- In general, strong bull trends break out beyond resistance and stall after the breakout. Legs within trading ranges will get close to the resistance level and start to go sideways just under it.
- Overall, it will be important to see what kind of pullback the Bulls get. Bears need to do more and demonstrate strength before they will be able to develop a credible swing short. One way they could do that is to make the market go sideways and form a lower high with the February 2nd high.
Emini 5-minute chart and what to expect today
- Emini is up 6 points in the overnight Globex session.
- The Globex market rallied in the early morning hours after going sideways for several bars last night.
- Traders should assume that today will have a lot of trading range price action. This means traders should pay close attention to the open of the day, as it will likely be an important magnet today.
- The bulls will probably not get another bull trend day today, so if there is an early morning rally, traders will look to sell the rally similar to yesterday.
- As always, most trades should wait for 6-12 bars before placing a trade unless they are comfortable with limit orders.
- Most traders should try and catch the opening swing trade that usually forms a double top/bottom or a wedge top/bottom. The swing trade typically begins before the end of the second hour.
- Overall, traders should assume that the bulls will probably be disappointed today, which means the market will probably get a close below the open or a weak bull bar.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD tried to form a double top lower high major trend reversal with yesterday’s sell signal bar. However, the market formed a bull reversal bar yesterday.
- The market is forming a tight trading range, which is bad for stop entries.
- The February 1st high close is a magnet, and the market will probably have to reach it soon.
- The bears want a bear reversal bar today, which would trap the bulls into a bad buy above yesterday’s buy signal bar.
- Most traders should wait for a strong breakout up or down with follow-through. The market is deciding between trend resumption up, a breakout above February 2023 high, and trend reversal (Major trend reversal). Traders should assume the market will continue disappointing both the bulls and the bears.
Summary of today’s S&P Emini futures price action
Al created the SP500 Emini charts.
End of day review
- Live stream video trial replacement of end of day review coming soon.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com 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.
Wouldn’t b67 also be a HL MTR? Also, why do some of these charts/entries differ from the Encyclopedia access?
Yes, bar 67 is a higher low major trend reversal. The problem with the bar is it is in a tight trading range with eight overlapping bars. This will lower the probability of the buy on 67. Remember, most major trend reversals are minor reversals that lead to more sideways trading.
This means that the term “major” is a lower probability event, and one should assume that a major trend reversal 60% of the time will lead to more sideways trading.
Why is the sell below 10 not a blue box setup? Is the bear surprise and double top with prior selling pressure not enough?
Right, but the bull leg was kind of a surprise, too. So confusion, might be just trading range price action at this point. Higher probability after the retest of the EMA from below.
Selling the bar 10 low is reasonable, it is a Double Top, and the bears should get a second leg down after the first 3 bars of the day. You are not wrong in your thinking.