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Emini Stalled at 4,000 Big Round Number

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Trading Update: Thursday November 17, 2022

Emini pre-open market analysis

Emini daily chart

  • The bears continued to go sideways around the 4,000 big round number before a big gap down overnight. The Market is deciding what will happen after the Emini stalled at 4,000 big round number.
  • While the odds favor higher prices and a test of the September 12 low, the problem the bulls face is that the market has been going sideways and forming more selling pressure.
  • Last week’s breakout happened after a wedge ending on November 1. This increases the risk that last week’s bull breakout is a trap and that the market will have to reach the November 1 low.
  • The channel down to the October low is tight. Therefore, the bulls need a major trend reversal to form a credible bottom.
  • The bulls have a breakout up to November 1, lasting enough bars. However, the problem the bulls have is that the November 3, higher low came after a three-bar selloff, which may not be enough bars down. This means that it is possible that the entire rally up to November 16 is the trend line break and that the bulls will need to retest the November 3 low and form a credible double bottom higher low major trend reversal before the bulls can get a good rally.
  • Traders should also pay attention to the high of last week as the bears will try hard to close the market below on the weekly chart.

Emini 5-minute chart and what to expect today

  • Emini is down 50+ points in the overnight Globex session.
  • The Globex market has sold off during the overnight session and closed the gap above the November 1 high (3,924.25). During this selloff, the bears got 10+ points below the November 1 high.
  • The November 1 high may be support as the market has tested.
  • As always, traders should expect a trading range open which means a limit order market. This means most traders should wait for 6-12 bars before placing a trade.
  • Traders can also wait for a credible stop entry, such as a double top/bottom or a wedge top/bottom.
  • Traders should pay attention to the high of November 1 (3,924.25) as it might be a magnet all day.

Yesterday’s Emini setups

Emini trading range open then bull trap and lower high double top led to bear channel and trending trading range day

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

EURUSD Daily: Market Hesitating at the 2017 Low
  • EURUSD is stalling at the 2017 low following the strong bull breakout last week.
  • While the bears would like to reverse last week’s bull breakout, the odds currently favor a second leg up.
  • At the moment, the market is forming overlapping bars that are likely the start of a pullback that will lead to a larger second leg up.
  • It is possible that November 15 was the second leg for the bulls and the last day was the pullback dividing the first leg from the second. However, the problem with this argument is that the second leg (November 15) is too small compared to the first. The market likes to have symmetry, which makes me think the market will need a larger second leg up.
  • The bears need to develop more selling pressure here and collect bear bars closing on their lows if they are going to reverse last week’s breakout.
  • Overall, traders should expect any selling to be brief and for the market to continue sideways to up unless the bear can begin to collect big bear bars closing on their lows. The market has formed a bear channel for over a year and a half. Bear channels typically convert into trading ranges, which increases the odds of sideways to up trading for several months.

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

Emini high 2 and lower low major trend reversal led to major bull surprise and measured move but nested wedge top was midday trend reversal

Al created the SP500 Emini charts.

End of day review

  • I will update at the end of the day.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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.

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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