Trading Update: Thursday November 10, 2022
Emini pre-open market analysis
Emini daily chart
- The bulls got a strong, surprise upside breakout after the 5:30 AM PT Globex report.
- Yesterday, the bears got their reversal down testing the November 2 close. The bears hoped that the follow-through will be strong today; however, the problem the bears faced was the 4-bar bull micro channel that happened before yesterday’s bear close.
- The bulls see yesterday as a pullback that will lead to a double bottom with the November 3 low. Next, the bulls have a strong buy signal bar followed by an upside breakout.
- Ultimately, the odds strongly favor the market reaching 4,000 soon.
- While it is possible the market could break to the downside first, even if the market does test the October low, it probably will still favor a test of the 4,000 big round number. This is such a critical price level and is very close to the middle of the year-long trading range that it will likely remain an essential price for some time.
- The bears see September 21 and November 1 as a double top bear flag, and they want a breakout below the October low (neckline) and a measured move down testing the monthly chart trendline (2008 and 2020). The odds favor the market getting to this trendline over the next few years. The odds favor a test of 4,000 before the market gets to the monthly chart trendline.
Emini 5-minute chart and what to expect today
- Emini is up 125 points in the overnight Globex session.
- The Globex market had a strong upside breakout on the 5:30 AM PT report, and the market will gap up on the open.
- The market will probably have to go sideways to down on the open and relieve the bulls.
- Traders should expect a second leg up after the gap at some point on the open. However, a trend from the open lasting all day is not likely, so if the market rallies on the open, traders should expect a trading range to last a few hours to relieve the bulls.
- The upside breakout during the 5:30 AM PT report was a strong statement by the bulls and will likely have follow-through, but the pullback might be deep, which means the day session could go sideways to down on the open before the bulls get their second leg up.
- As always, traders should be cautious on the open and consider not trading for 6-12 bars. This is because the odds favor a limit order market on the open.
- Traders can consider waiting for a double top/bottom or a wedge top/bottom since the market typically will form one for these patterns before a swing trade happens.
- If the market does form a trend from the open, up or down, a trader should remember that there will be a 60% chance that the market will transition into a trading range and only a 20% chance that the trend from the open will last all day.
- The bars will likely be big, especially on the open today. This means traders need to trade smaller than usual.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bears are trying hard to trap the bulls and form a double top with October 27. The odds favor this being a pullback and the bulls getting a second leg up of the past three consecutive bull bars.
- The bulls have gotten much buying pressure that the odds slightly favor the upside breakout and test of 2017 low and the August high.
- The bears have a credible argument here, and there will be bears who sold below yesterday’s sell signal bar betting out the bear breakout and test of the November 3 low. The bears ultimately want a breakout below November third and a measured move down below the September low.
- Another problem the bears have is that yesterday’s signal bar is a part of a four-bar bull microchannel which will lower the probability for the bears.
- Update After the 5:30 AM Globex report, the market is now trying to break out above the November 8 high. The bulls have the potential to get a strong breakout here today, so traders will pay close attention to them today.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Brad created the SP500 Emini charts. Note, the chart above is in Central Time
End of day review
- Today was a trend from the open that led to a trading range, then la ate resumption up.
- The day gapped up over 100 points, so the odds favored a trading range lasting at least a couple of hours to relieve the buying pressure.
- The day was likely to either be a bull trend day or a trading range day, less likely a bear trend day.
- On a day like this, where the gap is huge, it is essential to expect a lot of sideways trading.
- The three hours formed a wedge top, leading to a trading range for several bars. The bears tried to take control around 12:00 Central Time) below the moving average; however, they needed more. This meant the odds favored any selloff leading to a trading range.
- Today’s range was over 200 points. This makes today climactic and increases the odds of going sideways to down for a few days.
- The bulls will try their best to get follow-through tomorrow. The market is so close to 4,000 that it will probably have to get there in the next day or two.
- Video will be uploaded 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.
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.