Trading Update: Tuesday November 23, 2021
Emini pre-open market analysis
Emini daily chart
- Yesterday made a new all-time high but became an outside down day that closed near its low. It is a double top sell signal bar for today for a higher high major trend reversal.
- Last week’s range was small. This week might become an outside down bar on the weekly chart.
- If the month closes below the open of the month, there will be a bear bar on the monthly chart. That would increase the chance of lower prices in December.
- However, the daily chart has been in a Small Pullback Bull Trend since the October 13 low. There have been many reversal attempts and all were minor. This reduces the chance that the reversal will be major.
- If today is a bull inside day, it will be a buy signal bar for tomorrow.
- If today is another bear bar closing near its low, it would increase the chance that the selloff will continue down to the open of the month by the time the month closes next week.
- If today is not a strong bull day, the selloff should continue down to the November 10 low, even if there is a bounce first. The bulls will try to get a reversal up from a double bottom bull flag with that low.
- More likely, the Emini will be sideways to down for at least a couple weeks.
- Today is a good candidate for the high of the year. But the bears will need several big bear bars before traders will believe that this selloff will grow into a bear trend.
- A market often pulls back just before a candlestick closes. On the yearly chart (not shown), the Emini might pull back into the end of the year, which would put a conspicuous tail on top of the bar. That would make this year’s bar less bullish.
Emini 5-minute chart and what to expect today
- Emini is down 1 point in the overnight Globex session on the daily chart.
- Yesterday had 2 strong selloffs and closed near the low. It was a sell climax day.
- The bears want a gap down today and then a strong bear trend. If there are early bear bars closing near their lows, whether or not there is a gap down, there will be an increased chance of a bear trend day today.
- However, when there is a sell climax into the close, there is a 75% chance of at least a couple hours of sideways to up trading that starts by the end of the 2nd hour. That reduces the chance of a Bear Trend From The Open today.
- The bulls want a reversal up. But the selloff was a Major Bear Surprise. It will probably affect the next several days. Traders will look to sell the first strong rally, even if it lasts for a couple days. There is at least a 50% chance that the Emini will work down to the November 10 low.
- However, a strong bull trend day today would erase much of yesterday’s bearishness. Today would then be a High 1 buy signal bar for tomorrow.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Last week had consecutive big bear bars closing near their lows. Also, the 2 bars were a breakout (below a bear channel). Traders expected at least a small 2nd leg sideways to down. The past 3 days met the minimum expectation.
- However, a breakout below a bear channel typically begins to reverse up within about 5 days. Today is the 7th day and so far has a small bull body.
- The bigger the body today and the more today closes on its high, the more traders will buy tomorrow, hoping for a reversal up. If today is the low, the 1st target will be the November 18 lower high.
- With the sell climax as extreme as it has been, there should be a rally lasting at least a couple weeks and having at least a couple legs beginning soon. The selloff is extreme on the weekly chart as well.
- A reversal could lead to a trading range that lasts a couple months.
- The selloff is near the June 19, 2020 higher low, which is a magnet below. If there is going to be a reversal up for a few weeks, many traders would like it to come after testing that support.
- The momentum down is strong so traders expect lower prices.
- But the selloff has been extreme. It is therefore climactic, and it is in a zone of support. This increases the chance of a reversal up for at least a couple weeks beginning soon.
- We are near the end of the year. Major currency reversals have an increased chance of coming at the start of a year. Therefore, the EURUSD might continue sideways to down through December.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- After a test of the open of the week in the first 10 minutes, the Emini rallied strongly to the EMA. The rally was a Major Bull Surprise, which made a bear trend day unlikely.
- It was a buy climax and bears sold it.
- After new low, the Emini reversed up from a nested wedge bottom and entered a trading range.
- Closed a little above the open of the day so today was a bull doji on the daily chart.
- Because today was not a big bull day closing on its high, it is not a strong buy signal bar on the daily chart. This is especially true after yesterday was a big bear outside down day.
- The Emini is still in the middle of its 7-day range.
- The bulls want the week to close above the open so that this week will be a bull bar on the weekly chart.
- The bears want a bear bar on the weekly chart. They also want a bear bar on the monthly chart when November closes next Tuesday. That would increase the chance of lower prices in December.
- Sideways for 7 days increases the chance of more sideways tomorrow.
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 trading room. 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.