Trading Update: Monday March 28, 2022
Emini pre-open market analysis
Emini daily chart
- Emini tight bull channel on daily chart and near the February 9 high and 4,600. Both of these are magnets, and the market is probably close enough it will have to get there.
- The bulls are hopeful that this rally will continue up to the all-time high.
- More likely, the market is in a trading range, and the bulls will be disappointed soon.
- The bears want a double top with the February 9 high; however, they will likely need a micro double top to have any chance at a sell-off.
- The market will likely go sideways around the February 9 highs. It is the top of a channel and an obvious resistance area in a large trading range.
- The market had a bull breakout of the neckline of a double bottom (March 8 and March 14). Since the market is in a trading range, traders should be aware that the market may have to test the breakout point on March 3 over the next couple of weeks.
- Overall, traders should expect the bulls to become disappointed over the next few days and the market to begin to go sideways at resistance (February 9).
Emini 5-minute chart and what to expect today
- Emini is down 3 points in the overnight Globex session.
- The market had a spike and channel rally in the early morning hours that is now forming a trading range.
- Traders should expect a trading range open. This means traders should be patient and wait for a credible stop entry or a strong breakout with follow-through.
- Traders should expect the market to open near Friday’s close with no large gap up or down.
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bears are trying hard to get a successful double top with the March 10 and March 17 highs. They hope this selloff will reach the March low and get a bear breakout to test the 2020 price levels.
- While the market is not clearly always in short, the bears are getting close with the number of bear bars they have gotten in the past 7 bars. The bears still need more, though.
- The bulls are hopeful that they can soon disappoint the bears and get a rally today or tomorrow.
- Remember, the market is in the middle of a tight trading range, so the probability is close to 50%. Otherwise, the market would be favoring a direction.
- The bulls hope this is another higher low after the March 14 higher low. They want these higher lows to be the start of an early bull trend and the low for the rest of the year that will rally back up to the February highs.
- The market had a bear breakout below a bear channel in early March. The odds were it would fail so that traders would expect a test of the top of the large bear channel. The market can get there by going sideways or getting an upside breakout of the March bear flag.
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
- Today opened with a sideways trading range of about 2 hours.
- The bears got a breakout that led to a test of the bottom of last Friday’s rally (HL around 12:30 last Friday).
- The selloff to 9 am was a wedge bottom with consecutive sell climaxes.
- The bulls got an endless pullback, leading to a small pullback bull trend and a rally into the close.
- Today is a good reminder of just how far a rally can go, and it is usually better to let selling pressure build before looking to sell.
- The rally was climactic, so traders should expect at least 2 hours of sideways trading on the open.
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. I talk 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 I mention time, 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.
Is bar 12 a good H1 entry? It’s bouncing off the EMA and follows weak bear dojis
Bar 12 is forcing traders to buy in the middle of the range. In general, the trading range so a 50% probability in either direction.
The math is not great buying there, which is why the market went below the signal bar and turned up. Traders who bought bar 12 likely bought more lower, confident it would get back to the 12 close at a minimum.
Other traders waited for bar 15, which had a wedge bottom with a smaller signal bar with less risk. When the probability is not great, you want to make up for it with a stronger risk/reward.