Trading Update: Thursday August 3, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini gapped down and is testing near the 4,500 big round number.
- The bulls hope the market will find strong support at 4,500 and the June high.
- The bears want a strong follow-through bar today, closing far below the moving average (blue line). Today will likely disappoint the bears and remind traders that the market is in a trading range.
- The market is transitioning from a tight bull channel to a trading range. The trading range will probably last several months and eventually test back to 4,400 and the June 26th low. However, the market could take several weeks to reach the June 26th low.
- The bulls want today to be a strong bull bar closing on its high. This would reverse yesterday’s bear trend bar, creating a buy signal bar at the moving average.
- The market has been away from the moving average for over 20 bars. This is a sign of strong buying pressure and increases the odds that the market will have difficulty breaking out below it without going sideways and developing more selling pressure.
- The August 16th high on the weekly chart is an important magnet. Some bears sold the August 16th high, willing to scale in higher. Those bears will likely buy back at least part of their short position at the August high. This will increase the odds that the market will reach the August high in the next several weeks.
- Overall, traders should expect the bears to become disappointed after yesterday’s strong bear close and for the market to go sideways around the moving average.
Emini 5-minute chart and what to expect today
- Note, I have to type the report around 6:50 AM EST so the Globex market can look much different by the time the market opens.
- The Globex market sold off and is currently below yesterday’s low. The bears hope the market will gap down and form another bear trend bar on the daily chart.
- More like the market will have a lot of trading range price action.
- As I often say, most traders should expect a trading range open lasting at least 6-12 bars.
- Traders should pay attention to the day’s opening and yesterday’s low, as it will likely remain an important magnet for most of the day.
- Lastly, traders must not deny the price action in front of them. If the market is beginning to form trending price action, traders must find a way to enter at least a small position in the direction of the trend.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is testing the July 6th Signal bar high. The breakout above the July 6th high was strong. This increases the odds that the signal bar high (July 6th) will act as support.
- The bears hope to continue down the tight bear channel. However, it will probably bounce soon and disappoint the Bears.
- The channel down from the July high has several overlapping bars. This increases the odds that the selloff will soon convert into a trading range.
- The channel down is tight, which increases the odds that the first reversal up will fail.
- Overall, traders should expect the daily chart to go sideways and disappoint the bears after their recent selloff.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Today’s End Of Day review will be presented in the Trading Room and only available to the trading room subscribers.
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.