Trading Update: Tuesday May 23, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini triggered the sell below last Friday’s low and reversed up. Bulls have a high 1 buy signal bar today. However, it closed as a doji, a weak High 1 buy signal bar.
- The Bulls will likely get a second leg up and a test of the February high. However, yesterday’s signal bar increases the probability that the bears will get a small second leg down after last Friday’s bear bar.
- At the moment, the market is Always In Long. This means that traders will buy for a second leg up. The problem the bulls have is that the market is at the top of a trading range. This increases the risk of a possible trap for the bulls.
- The bears must create more selling pressure to convince everyone that last week’s two-bar bull breakout will fail.
- However, if bears manage to get the market to go sideways for a couple of bars and form a 2nd entry short, that would lower the probability for the bulls.
- Overall, the bears are trapped who sold during the bull breakout last Wednesday and Thursday (May 18th). The Bulls have an opportunity to get a strong 2nd leg up and need to take advantage of it.
Emini 5-minute chart and what to expect today
- Emini is down 16 points in the overnight Globex session.
- The overnight Globex market reached yesterday’s U.S. Session high and sold off, testing and breaking below yesterday’s low.
- The bears want today to close on its low. However, today will likely be a trading range day and disappoint the bulls and the bears.
- The bulls will try and get a bull trend bar closing on its high. If the market closes below yesterday’s high, this will create a High 1 buy signal bar.
- As I often say, traders should expect a lot of trading range price action today and for the market to go sideways for the first 6-12 bars. This means there is no rush to trade on the open because the odds favor sideways trading.
- Most traders should try and catch the opening swing that often begins after the formation of a double top/bottom or a wedge top/bottom. The opening swing will typically begin before the end of the second hour.
- Overall, traders should expect a trading range day. Lastly, traders should pay close attention to the day’s open as it will probably be a magnet for most of the day.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The Bulls tried to get a reversal up over the past two days. However, the channel down is tight. This increased the probability or more sideways to down.
- The bears want to get down to the March 24th low, the bottom of the bull channel that rallied up to the May high.
- If everyone agrees that the market will have to reach it (March 24th), it could get a sell vacuum test of the support level.
- Bulls want to create support and form a double bottom with the Mach 24th low. The likelihood the bulls have with the argument of the double bottom is that the bear channel is tight. This increases the probability that the first reversal down will fail.
- Overall, traders should expect more sideways to down and a test of the March 24th low. The bulls need to create more buying pressure, such as a micro double bottom, if they will get a reversal up.
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.
Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com 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.