Trading Update: Monday September 19, 2022
Emini pre-open market analysis
Emini daily chart
- The market reversed up late Friday, painting a tail on top of the bar.
- The market will likely have to reach the September 6 breakout point soon and close the open gap with wedge bottom likely rally and test of 4,000.
- The bears will try and defend the gap and keep it open. However, the odds favor the gap close and a couple of weeks up higher prices.
- The bulls want a reversal up and a failed breakout below the September 6 low.
- The selloff down to September 16 is in a bear micro channel, so the first reversal up should fail. However, the bear’s problem is that the selloff forms a wedge bottom (8/24, 9/1, and 9/16). This increases the odds of a reversal up soon and a test of the 4,000 big round number.
- While the selloff since mid-August has been good for the bears, the issue the bears have is that the daily chart is in a broad trading range which increases the odds that the bulls should be disappointed soon.
- At the moment, the odds favor a reversal up for a couple of legs after the wedge bottom (stated above) before much lower prices.
- Overall, a logical target for the bulls is the 4,000 big round number. It has been a vital price level all year. Traders will look for a reversal up and test of the September 6th low and, ultimately, a test of the 4,000 big round number.
Emini 5-minute chart and what to expect today
- Emini is down 35 points in the overnight Globex session.
- The market sold off during the overnight Globex session. However, the channel down is beginning to evolve into a trading range.
- Traders should expect a trading range open and the market to go sideways to the moving average.
- This means most traders should wait for 6-12 bars before placing a trade.
- Traders can also consider waiting for a credible stop entry, such as a double bottom/top or a wedge bottom/top.
- Traders should also pay attention to Friday’s high as the market may trigger the buy above sometime today.
- Overall, remember the most important thing on the open is to be patient and wait for a good trade. If today is going to be an intense trend day, there will be plenty of time to enter the trend’s direction. It is best to assume that all breakouts will fail until there is a clear, strong breakout with follow-through.
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The bulls have prevented a second leg down following the September 12 bear breakout.
- If the bears cannot get a second leg down soon, they will give up, and the market will test back to the September 12 low and possibly the September 13 high.
- The bulls probably need to do more before the bears give up.
- At the moment, more and more bears are trying to buy back shorts at the September 13 close, which is good for the bulls.
- Overall, the bulls need to create a big bull bar closing on its high, increasing the odds that the bears have given up. Otherwise, the bears will likely get at least a small second leg down. However, it is possible that Friday was the 2nd leg down. Even if the bears get the 2nd leg down, the odds still favor a rally and test of the August high at some point soon.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini charts.
End of day review
- The market formed a wedge top that led to a deep pullback and sideways trading for several hours.
- The market formed a trend from the open bull trend, which meant there was a 60% chance of the market forming a trading range at some point.
- The bears tried to get a reversal down around 8:30 PT, however, when the odds favored buyers below after the rally up to bar 18.
- The selloff at 8:30 PT led to a wedge bottom and a triangle until around 11:30.
- The bulls got a bull breakout of the triangle and trend resumption up into the close.
- One interesting thing to point out was that the rally around 12:15 was partly due to a tes60-minute60 minute moving average. It has been away from the moving average for some time, and the odds favored a retest of it.
- Overall, today was a good day for the bulls. They triggered the buy above last Friday and tested into the September 6th breakout point gap. This is probably the start of sideways to up and a test of 4,000 considerable round number.
- I have ordered a new microphone that should come in tomorrow therefore, I will begin to release more end-of-day videos as requested.
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. Al talks 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 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.