Trading Update: Wednesday September 27, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini sold off yesterday, testing near the 200–day moving average and the 4,300 big round number.
- Both of the prices mentioned above levels will probably act as support and limit the downside over the next couple of days.
- The selloff on the daily chart is climactic, and the odds favor a pullback lasting a couple of bars over the next few days.
- Right now the daily chart is forming a follow-through bar closing near its low. Since today is Wednesday, the halfway point in the week, traders should be open to the possibility of a reversal up and a test of the open of the week.
- The bulls still expect a test of the August 18th low to allow the trapped bulls who bought this low and scaled in lower.
- The bears want the August 18th low to become a successful measuring gap leading to a measured move down from the September 1st high to the August 18th low.
- While the bears may get their measured move down, more likely the market will reach the August 18th low, before the bear gets their measured move down.
Emini 5-minute chart and what to expect today
- Emini is up 15 points in the overnight Globex session.
- The 60-minute Globex chart has been in a tight bull channel since yesterday’s close. The bulls are hopeful that the overnight/morning rally is the first leg and the U.S. session will form a second leg and test of yesterday’s high.
- The odds favor today closing above today’s open and forming a bull bar on the daily chart.
- There is an 80% chance of a trading range open and only a 20% chance of a trend from the open. This means that most traders will be better off expecting a trading range on the open and being more cautious.
- It is common to get surprise breakouts on the open that trap traders into entering a breakout with a lower probability of success than one thing.
- Generally, everything is closer to 50% on the open. This means lower probability events have a greater risk of happening, and higher probability events have a slightly lower probability.
- This means that most traders should try and catch the opening swing that often begins after the formation of a double top/bottom or a wedge bottom/top.
- Waiting for one of the stops mentioned above entries to form often provides traders with a great risk/reward trade.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD closed below the May 31st low and formed a follow-through bar yesterday.
- At the moment, today is another strong bear breakout bar. However, the bears will have to prevent any strong buying pressure for the entire U.S. session if today is going to close on its low.
- More likely, the bears will get disappointed with today’s breakout bar.
- Because the daily chart is always in short and in a tight bear channel, traders will sell, taking a chance that the market goes lower. However, those bears will likely be quick to exit if the bulls get a reversal today.
- More likely, the bears will become disappointed over the next few days, and the market will go sideways. The bulls still expect the market to reach the moving average.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Here is YouTube link if video popup blocked:
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.