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Emini Likely to Disappoint Bulls and Test 4,000 Big Round Number

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Trading Update: Monday December 5, 2022

Emini pre-open market analysis

Emini daily chart

  • The Emini is forming a wedge top (November 1, November 15) at the September 21 low. Emini likely to disappoint the bulls soon and the market will test 4,000.
  • The bulls want a second leg up after the November 30 bull breakout; however, even if the bulls get a second leg up, the market will probably have to pull back soon.
  • The market is also at a major bull trendline (March 29 and August 16), which will act as resistance.
  • The bulls see open gaps during the current rally from November and hope these will lead to a measured move up, testing the August 26 high.
  • The bears see the current rally as a leg in a trading range, and they are probably correct. The market will likely get drawn back to the 4,000 big round number soon.
  • The market had a big selloff down to the October low, followed by a big rally up to the November high. This is big up, big down, which often leads to sideways trading.
  • Overall, the bull will probably be disappointed soon, and the market will have to test 4,000 and the November 1st breakout point soon.

Emini 5-minute chart and what to expect today

  • Emini is down 23 points in the overnight Globex session.
  • The overnight Globex market has been selling off, forming a pullback of last Friday’s rally.
  • The market may have to go lower and test back down to last Friday’s 5:30 AM PT bear breakout bar (report bar).
  • As always, traders should expect a lot of trading range trading on the open. Most traders should consider waiting for 6-12 bars before placing a trade. This is a general guideline since most days typically go sideways on the open for a few bars.
  • Traders can also consider waiting for a credible stop entry as a double top/bottom or a wedge top/bottom.
  • Traders should also pay attention to the November 30 breakout bar close (4,081.25), as it will likely act as resistance due to disappointed bulls who bought the November 30 breakout.
  • Overall, traders should be mindful that the bulls likely be disappointed on the daily chart soon, which means today or tomorrow will probably be for a bear day.

Friday’s Emini setups

Emini bull trend from the open after big gap down. Emini likely to disappoint the bulls soon.

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from Friday. 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

EURUSD Daily: Second Leg up after Rally
  • The EURUSD is getting a second leg up after the November 10 and 11 upside breakout. At the moment, the odds are that the market will have to reach the measured move projection (red line at top of chart).
  • The bears hope this current rally will fail and become a failed breakout above the November 15 high.
  • The bears have a problem: the second leg up is a three-bar bull micro channel with all three bars closing near their highs.
  • Most bears will wait for at least a micro double top before looking to sell for a test down.
  • The bulls need to demonstrate strength and have today close as a bull breakout bar closing on its high far above the November 15 high.
  • Overall, traders will pay close attention to today to see if the current bar will close on its high or the current bar will close as a bear bar and be a possible failed breakout of the November 15 double top.

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.

Trading Room

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.

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