Trading Update: Tuesday March 28, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The market is continuing to go sideways around big round number 4,000. This has been an important magnet for almost a year. The market will likely continue to oscillate around 4,000 for some time.
- The bulls had a decent entry bar last Friday; however, as expected, yesterday was a bad entry bar for the bulls. This will weaken the bull argument of last Friday, leading to a swing trade and a test of the March 6th high.
- Strong breakouts trap limit order traders fading the breakout. If the bulls had gotten a strong bull bar yesterday, that would have trapped limit order bears selling above last Friday’s high and increased the odds of higher prices.
- The market can still get an upside breakout. However, the probability is lower now.
- The bears see yesterday as the pullback from last Wednesday’s outside down bar. Next, the bears want today to trigger the sell below yesterday.
- The odds are that there are buyers below yesterday. However, if the bears can get a strong entry bar today, that might trap limit order bulls who would have bought yesterday’s bear bar below. If the bulls get trapped, that could be enough to create a downside breakout.
- The most crucial thing to realize is that the market is in a tight trading range, breakout mode.
- Until there is a strong breakout with follow-through, the odds are that the market will continue to go sideways. This means traders should expect breakouts to fail until there is a clear breakout with follow-through closing beyond support or resistance.
Emini 5-minute chart and what to expect today
- Emini is down 12 points in the overnight Globex session.
- The Globex market is testing yesterday’s lows. However, the selloff that begins in the early morning hours looks like a bear leg in a trading range.
- Yesterday’s low will be an important magnet for the market today.
- As mentioned above, the bears want a strong breakout below yesterday’s low and for today to close below it. More likely, the market will find support at yesterday’s low.
- As I often say, traders should expect the market to go sideways for the first 6-12 bars. This means traders should be prepared or limit order trading during the first hour until there is a clear swing setup.
- Most traders should try and catch the opening swing trade. There is greater than an 80% chance of a swing trade beginning before the end of the second hour. One usually happens after the formation of a double top/bottom or a wedge top/bottom.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD formed a High 1 buy signal bar yesterday. It follows a two-bar selloff, which will lower the probability of the buy.
- The rally up to March 23rd is strong enough to lead to a second leg up. This means bulls will buy above yesterday’s High 1 buy signal bar and likely scale in lower, betting on a second leg up.
- The bears see March 23rd as a lower-high major trend reversal. However, there are too many bull bars up to the March 23rd high. This will lower the probability of the bears selling below March 23rd.
- Overall, the market is probably going above the March 23rd high and will begin to go sideways and continue the trading range price action.
Summary of today’s S&P Emini futures price action
Al created the SP500 Emini charts.
End of day review
- Live stream video trial replacement of end of day review coming soon.
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.