Trading Update: Thursday April 14, 2022
Emini pre-open market analysis
Emini daily chart
- The bulls got a strong bull close today and now have a second entry buy. The channel down from March 29 is tight, which increases the odds that the first reversal up will be minor.
- The bulls hope they can get a strong entry bar today; more likely, today will be disappointing for the bulls.
- The bulls also have a wedge bull flag with the March 29 selloff. Again the channel is tight. However, some bulls will buy here, betting that the market will test back up to the March 29 high.
- The bulls hope that yesterday is the start of a successful higher low major trend reversal that will test the all-time high. You can also call it a head and shoulders bottom as well (Left shoulder January 24, Head Feb 24, Right shoulder April 13).
- The bears hope that the market will soon break below the April 13 wedge bull flag, and the market will get a measured move down from the March 29 high to the April 13 low.
- Overall, the daily chart is in a trading range, and traders should expect disappointment and today to either have a weak bull close or a bear bar. Either one of these would be bad follow-through for the bulls.
Emini 5-minute chart and what to expect today
- Emini is down 6 points in the overnight Globex session.
- The market has gone sideways for most of the Globex trading session.
- At the moment, the market will likely open with little to no gap on the day session.
- Since yesterday was such a strong trend day, there is an increased chance of the market going sideways on the open for at least 2 hours. This means traders will expect a limit order market and consider waiting for 6-12 bars before trading.
- As always, traders should be cautious about buying too high or selling too low in the initial opening range. Often the market will open, and there will be a fast move up or down that traps traders into doing the wrong thing, so it is essential to be cautious on the open.
- As Al often says in his trading room, if today is going to be a trend day, there will be plenty of time to enter after it has clearly become a trend. The point of bringing this up is to not be too eager to place a trade on the open and get trapped in the wrong direction. Especially if the market opens with trading range price action, which it likely will.
- Traders should consider waiting for a credible stop entry in the form of a wedge top/bottom, a double top/bottom, or a strong breakout with follow-through.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD ended the nine consecutive bear bars on the daily chart by getting a bull close yesterday.
- Bulls now have a double bottom with March 7 and a second entry buy setup. This is a credible swing buy, and bulls will buy, betting on a low of the next couple weeks and a test back up to the march high.
- The channel down from March 31 is tight, so the odds favor more sideways than up.
- The bears hope that they can get a Low 2 (second entry short) at this price level and that the bears can successfully get a surprise bear breakout below the March 7 low.
- The bulls need a strong bull close today, which would create a strong entry bar for yesterday’s bull signal bar. More likely, we are in a trading range, and the bull entry bar will be disappointing.
- If the bulls can get 2-3 strong bull bars closing on their highs, the market would be always in long, and the odds are it will test the March high and possibly get a measured move up of the March range, which would project above the February 2022 high.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini charts.
End of day summary
- The Emini opened as a bear trend from the open.
- The market formed a wedge bottom around 7:00 PT, and the market went sideways to the moving average. The bulls tried to break above the moving average around 8:15 PT, however, the bulls formed a wedge bear flag that led to a selloff back to the low.
- The bears got another wedge bottom around 9:45, and the market was able to rally back into the trading range from 7:15 – 8:15 PT around 11:15 PT. The bulls formed a wedge top, and the bears sold off again back to a new low.
- Overall, today was a trend from the open that led to a broad bear channel for most of the day.
- Broad channels can be difficult because it is not clear. There are deep pullbacks, and the market looks like a trading range that is sloped down.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.