Trading Update: Thursday December 15, 2022
Emini pre-open market analysis
Emini daily chart
- Emini bears have a wedge top (Nov 11, Dec 1, and Dec 13). The odds favor at least a small second leg down, or sideways.
- The bears prevented a bull close yesterday after Tuesday’s big bear breakout bar. While yesterday was a bear bar, it is still disappointing for the bears.
- Yesterday’s bar sold off a couple of points below the 4,000 big round number and found buyers.
- The problem for the bears is that the past two days may be a sell vacuum test of 4,000 and the midpoint of the month-long trading range.
- At the moment, the odds favor a second leg down; traders will sell betting on at least sideways to down.
- The bulls want a double bottom with the December low; however, with the daily chart being in a trading range, the odds favor the bulls getting disappointed and the market closing the November 1 breakout point high gap.
- Ultimately, the bears will probably get a downside breakout and test the November low. However, the bears may run out of time this year.
- Overall, the market is in a month-long trading range around 4,000 and tells traders that this is an area of agreement. Since 4,000 is such a significant price level, the market may go sideways for the rest of the year.
Emini 5-minute chart and what to expect today
- Emini is down 68 points in the overnight Globex session.
- The bears got a breakout below yesterday’s day session low and are currently well below the 4,000 big round number.
- Today’s day session may close above the open of the day and disappoint the bears. This means traders should pay attention to the open of the day and if the market is not far below the open, and forming a bottom, consider looking to buy for a rally above the open.
- As always, traders should expect a Trading range open and consider not trading for the first 6-12 bars.
- Traders can also wait for a credible stop entry, such as a double top/bottom or a wedge top/bottom.
- Overall, traders should expect a trading range day until there is clear trending behavior.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD came within a few pips of the measured move target (Purple line at 1.0700) based on the November 10 and 11 bull breakout bars
- Bulls will take profits at this price level, and aggressive bears will sell for a scalp betting on enough profit taking for a profitable scalp.
- Traders can argue that yesterday’s rally is the third push-up, forming a wedge top (purple dashed line). This means a reasonable profit target for the bears is the December 13 low (green dashed line) or the December 12 low.
- The bulls know that the December 12 low is a logical target for the bears. The bulls might not be willing to buy again until the market has two legs down, testing the December 12 low at a minimum. December 7 may be the bottom of the third leg, meaning the market would need to reach that low before bulls are willing to buy.
- Overall, traders should expect the bulls to step aside soon and allow the market to get down a few legs, testing the channel’s bottom and the moving average (blue line).
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
- I will update at the end of the day.
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.