Trading Update: Wednesday June 21, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini gapped down yesterday and sold off, testing the June 15th buy climax low. This selloff is strong enough for a second leg down.
- The pullback may test the June 14th low before the bears can get a 2nd leg down.
- Even if the bears get a 2nd leg down, the overall context on the daily chart is bullish. This means that the best the bears can expect is sideways trading.
- The bears will need to develop more selling pressure to get a successful downside breakout.
- Overall, today will probably have a lot of trading range price action. If the market gets above yesterday’s high, sellers are probably above. There are also probably buyers below yesterday’s low and the June 14th buy climax low.
Emini 5-minute chart and what to expect today
- Emini is down 10 points in the overnight Globex session.
- The Emini has been in a trading range for most of the overnight session.
- The market is getting close to yesterday’s low, which will probably act as support today.
- As I often say, traders should expect a lot of trading range price action on the open. Most traders should wait for 6-12 bars before placing a trade unless they are comfortable with wide stops and limit order trading. ‘
- If the market begins to form 2-3 strong consecutive trend bars on the open with little overlap, traders must not be in denial of the possibility of a trend underway. However, this is a lower probability on the open.
- Most traders should try and catch the opening swing trade that typically begins before the end of the second hour.
- It is common for the opening swing to begin after the formation of a double top/bottom or a wedge top/bottom, allowing a trader to enter on a stop entry.
- Lastly, traders should pay attention to the open of the day as well as yesterday’s high and low.
Emini intraday market update
- The Emini has gone sideways for the first 40 bars of the day and will likely remain in a trading range for most of the day.
- The bears a trend from the open during the first 7 bars of the day; however, the selloff was likely to become a bear leg in what would become a trading range.
- The selloff during the first 7 bars was enough to make the market either a bear trend or a trading range. This meant that a bull trend day was unlikely.
- As of bar 50, the bulls have halted the selling and are trying to get the upside breakout of the day’s range.
- If the bulls get an upside breakout, they need to show signs of strength in the form of strong bull trend bars with little overlap.
- Ultimately, they will need to get a breakout with follow-through above the high of bar 1.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bears are trying to get a reversal of the large bull breakout from last week. The selloff will likely be minor and lead to a 2nd leg up.
- Since the market is in a trading range, the pullback from last week’s breakout might be deeper than what traders expect.
- The bears have a three-bar bear microchannel, which is good, but only one of the three bars closed below its midpoint. This is a sign of weakness by the bears.
- The bulls want the second leg to break above the May high with strong follow-through.
- The bears want to prevent a breakout above the May high. They hope the current rally will lead to a lower-high major trend reversal.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Live stream video review with Brad Wolff. Here is YouTube link if video popup does not work for you:
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.