Trading Update: Thursday June 1, 2023
S&P Emini pre-open market analysis
Emini daily chart
- Yesterday formed an Emini weak High 1 buy setup; however, it is a bear bar which increases the odds of sellers above.
- The bears tried to get follow-through selling yesterday after Tuesday’s bear reversal. However, the bears used yesterday’s selloff to scalp out, and the bull started buying.
- The bull breakout last Friday is strong enough for a second leg up and a test of the February high.
- The bears want last Friday to form a wedge top. However, the bull breakout on May 18th likely reset the count. This lowers the probability of the wedge being credible.
- The bears have done a good job preventing the bulls from getting measuring gaps. This increases the odds that any upside breakout will fail and continue sideways.
- The bulls need to get a breakout with follow-through above the February high, or else, traders will assume that the market is near the top of a trading range, and any bull breakout will fail.
- Overall, the market is at the top of a trading range that has gone on for the entire year. This means traders will sell near the top of the February high, betting that any upside breakout will fail.
Emini 5-minute chart and what to expect today
- Emini is up 2 points in the overnight Globex session.
- The Globex rallied during the overnight session to near 4,200 and pulled back. This is a Big Round Number and will likely be a magnet.
- Traders should expect a lot of trading range price action today and assume that the day will remain a trading range until there is a clear breakout with follow-through.
- It is important to remember that if the day is going to become a strong bull trend day, there will be plenty of time to enter in the direction of the trend.
- It is essential to be patient in the open until one is confident in their assessment of the probabilities for both the bulls and the bears.
- The market may have to test the high of yesterday’s since it is a high 1 buy setup. As I stated above, there will probably be sellers above the bar.
- Today, you may try and close above the open of the day. The bulls will try and form a bull trend day to increase the probability of the high 1 buy on the daily chart.
- Overall, traders should be patient with the open and wait for clarity. Even if that means not trading for the first hour.
Emini intraday market update
- The Emini sold off, forming a big bear bar on bar 1. However, it was low in yesterday’s range.
- Bar 1 was also a possible 2nd leg down following the end-of-day selloff yesterday.
- The bears got a small 2nd le down to bar 5 following bar 1. However, because the market was likely in a trading range, the bears failed, and the market reversed with four consecutive bull bars up to bar 9 (7:15 AM PT).
- The market will probably test the high of yesterday. Yesterday was a high 1 buy setup on the daily chart. The high 1 buy signal bar on the daily chart is weak, which increases the odds of sellers above yesterday’s high if the market gets there.
- The big round number 4,200 is also near, which is another likely target.
- At the moment, the bulls will probably get a small second le gup after the rally up to bar 9. However, the rally is within a trading range, which means the pullback could be deeper than what the bulls want.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD tested the March 20th low yesterday and reversed up.
- The channel down is tight, which increases the probability that the first reversal up will fail.
- The market is developing more buying pressure, increasing the odds of a test of the moving average (blue line).
- Bears were happy to sell below the moving average when the selling pressure was strong. However, most bears will be less interested in selling below the moving average if the buying pressure is strong.
- The bulls know that the bears are becoming less interested in selling at this price level, so they will buy, betting that the market has to get closer to the moving average.
- Since the channel down is tight, any test of the moving average is likely minor at best. This means the market will probably have to test down to this price level even if it reaches the moving average.
- It is reasonable for bears to exit shorts here because of the risk of a buy vacuum test of 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 your browser blocks video popup:
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.