Trading Update: Friday June 24, 2022
Emini pre-open market analysis
Emini daily chart
- The bulls want today to close above 3,800 and have a strong finish to week.
- Bulls are trying to get a reversal from the bear breakout below the May 20 low.
- The bulls closed just under 3,800 yesterday. The market will likely close above 3,800 going into the weekend.
- At the moment, the bulls need more, but it would not take much to make the bears give up, and the bulls get an upside breakout that tests 4,000, which will likely happen soon.
- The bulls probably have a credible shot at testing the June highs in the next month or two.
- The bears will try and prevent the market from going above the June high. If the bears are successful, they will still have the argument the daily chart is in a bear trend as long as the market stays below the June major lower high.
- The bulls want to close above the June high, which would be a sign of strength, and make the daily chart either in a bull trend or a trading range.
- I have mentioned the possible measured move projections in previous daily blogs (see June 22 daily blog for details); the odds are the market will bounce before it goes much lower.
- While the daily chart is in a bear trend, the higher time frames, such as the monthly chart, is in a bull trend. Bull trends typically do not immediately convert to bear trends. They first usually have to go sideways for many bars.
- This means the selloff on the monthly chart is probably a bear leg in a trading range, which means there will likely be a bull leg soon to follow on the monthly chart, which is why the odds favor a bounce soon on the daily chart.
- Today is Friday, so weekly support and resistance are important.
- At the moment, the bulls have a strong bull bar on the weekly chart. They want today to close near its high, which would cause the weekly chart to have a strong bull close this week. The bulls also will try and get the market to close above the May 20 low, which would be another sign of bull strength on the weekly chart.
- The bears want today to sell off and create as big of a tail on the weekly chart as possible. They know a close below the open of the week is too far away.
Emini 5-minute chart and what to expect today
- Emini is up 40 points in the overnight Globex session.
- The market has been in a trading range for several hours following a rally in the early hours of the Globex session last night.
- Today will gap up, so traders should be open to a trend from the open or a trading range open which is most likely.
- Traders should expect the market to go sideways on the open and test the moving average.
- If the bulls or bears get consecutive decent trend bars, the market will have the increased potential of a trend from the open.
- As I often say, if one has trouble on the open, they should consider waiting for 6-12 bars before placing a trade. The open always has a greater risk of breakouts reversing as bulls and bears decide on what the fair price is. So, if a trader waits for 6 bars, they will have more clarity on the type of day.
- Another thing to mention is that in general, on the open, the first initial move up or down has a 50% chance of leading to a major reversal (opposite swing). This means if one bet on a breakout, there is a 50% chance they will be wrong.
- Lastly, as I noted above, today is Friday, so traders should be open to a surprise move up or down as institutions decide on the close of the weekly chart. Friday always has a greater risk of a big move in the final hour of the day due to the chart closing.
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 EURUSD has been in a tight trading range for the past several bars and is in breakout mode.
- The most important thing to know is that the probability is close to neutral. If one side had a significant advantage, the market would be racing up or down and would not be going sideways like it is now.
- The bulls want a test of the June 9th high, and the bears want to reach the 2017 low (blue line).
- The odds are that the market will probably reach the June high soon, regardless of if the market sells off to the 2017 low first.
- So, if the odds are the market will reach the June high soon, why not just buy and bet on the June high test? Some traders will do this, but the problem is that the market might break several pips below the 2017 low before it reverses back up. Also, most traders would rather buy lower than in the middle of the two-month trading range.
- Today is Friday, so the weekly chart is important.
- The bulls want today the week to close as close to its high as possible. The weekly chart is a bull body just under the bar’s midpoint.
- The bears want the opposite. They want today to have as big of a tail as possible on top of the weekly chart bar. They will also try and close below the open of the week, but that probably will not happen.
- Bulls need the market to rally about 80 pips to get a close on the high, which is not likely today. This increases the odds of the weekly chart closing around the midpoint as the bulls and bears fight over a close above or below the midpoint.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
- Al will post chart after the close.
Al created the SP500 Emini charts.
End of day summary
- Today was a strong small pullback bull trend from the open.
- Although the market was sideways for most of the day, the bears never did enough to make the market Always In short. The bulls managed to keep the market above the moving average (blue line) for most of the day.
- The early bull breakout and the follow-through bar were a major surprise and increased the odds of a bull trend or trading range day.
- It is essential not to be eager to sell on a day like today. The selloffs were all very small and did not go that far, which is a sign of bull strength.
- Also, the market never went always in short which is another reason only to look to buy.
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.
