Trading Update: Friday March 25, 2022
Emini pre-open market analysis
Emini daily chart
- Emini bulls had a strong reversal following the L1 that was triggered on Wednesday. Bulls want strong close on weekly chart.
- The market is trying to test the February 9 high and the 4,600 considerable round number and will most likely have to reach it soon.
- The bears are hopeful that the market will form a micro double top soon and try to reverse the market and form another lower high with February 9.
- Right now, the odds favor the bulls in getting higher prices; however, if the market starts to go sideways, the probability for the bulls will quickly fall back to around 50%.
- The bears ultimately do not care if the market reverses here or back at the all-time high. They see the market as a trading range and no longer a bull trend. This means that even if the market reaches the all-time high, the bears will be eager to sell and try to form a higher high or a lower high major trend reversal and test back down to the February low.
- The bulls also got a bull breakout above the March 3 high so is a bull breakout above the neckline of a double bottom. The bulls are hopeful that the bull breakout above the neckline will reach the 4,666.25 measured move projection.
- Today is Friday, so weekly support and resistance are important, especially in the final few hours of the day.
- Right now, this week’s bar is a bull bar closing on its high. Bulls hope to keep the market around this price level and have the week finish as a strong bull bar.
- That would be two consecutive bull bars on the weekly chart, increasing the odds of higher prices.
Emini 5-minute chart and what to expect today
- Emini is up 12 points in the overnight Globex session.
- The Globex session has been in a trading range since Yesterday’s day session close.
- Traders should be open to a trading range day today, which would disappoint traders.
- Traders should expect a limit order market.
- In general, traders should only swing trade if there is a credible stop entry or a decent breakout with follow-through
Yesterday’s Emini setups
Al created the SP500 Emini charts.
Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).
My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter. These therefore are swing entries.
It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.
If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is still deciding between a bull breakout of the bear flag or a double top selloff back to the March low.
- Currently, the market is around the midpoint of the March trading range, which means the market is in breakout mode, and the probabilities are close to 50% for both bull and bears.
- Right now, the odds favor the bulls getting their bull breakout above the bull flag (probability is not 60%, though). This is because the market broke below a bear channel, so the market will have to test the top of the bear channel.
- While the bears have a double top with March 21 being the signal bar, it is possible that those bears may give up quickly.
- The past three days have been weak follow-through for the bears, which will likely cause more and more bears to give up. This means that there is potential for a bull breakout that reaches the March 21 high in the next few trading days.
- The bears need to get a strong bear close soon to convince traders to sell more betting on the double top.
- Overall, sideways is most likely over the next few trading days.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini charts.
End of day summary
- The bulls got a double bottom on the open that led to a wedge top.
- The wedge top was followed by a strong bear breakout and follow-through that led to a test of the day’s low and a beakout several points below.
- The problem the bears had was the size of the opening rally. Often when you get a reversal day, and the opening range is big, the odds will favor the reversal to lead to more trading range price action (for example, the rally from 8:00 am to 9:30.
- The bulls got an upside breakout of the bull flag around 10:00 am, leading to a high of the day.
- Overall, the market was in a trading range day with big swings up and down.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
Trading Room
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 on trading room days. 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.
