{"id":142203,"date":"2022-01-21T06:20:00","date_gmt":"2022-01-21T14:20:00","guid":{"rendered":"https:\/\/www.brookstradingcourse.com\/?p=142203"},"modified":"2022-01-21T21:08:03","modified_gmt":"2022-01-22T05:08:03","slug":"emini-at-bottom-of-3-month-trading-range","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/pt-br\/analysis\/market-update\/emini-at-bottom-of-3-month-trading-range\/","title":{"rendered":"Emini broke below December low at bottom of 3-month trading range"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Trading Update: Friday January 21, 2022<\/h3>\n\n\n\n<h2 class=\"wp-block-heading\">Emini pre-open market analysis<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Emini daily chart<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>The Emini formed a big bear bar closing on its low and below the December 3 low yesterday.<\/li><li>That is a break below the 3-month trading range.<\/li><li>Today is the follow-through day. If it is another bear day, it will confirm the breakout. That would make lower prices likely.<\/li><li>The bears want a measured move down to the October 4 low.<\/li><li>January is now an outside down bar on the monthly chart after December was an outside up bar. Consecutive outside bars is an OO (outside-outside) Breakout Mode pattern.<\/li><li>January is also a sell signal bar for the micro wedge on the monthly chart (there is an actual wedge top on the daily chart).<\/li><li>If February falls below the January low, it would trigger the OO sell signal and the micro wedge sell signal.<\/li><li>Traders would look for about a measured move down, based on the January range. Also, they would expect a test of the October low, which was the start of the wedge.<\/li><li>The selloff should test the 20-month EMA and the 200-day MA.<\/li><li>It could also test the gap on the monthly chart above the March 2021 high. That is below the 4,000 Big Round Number, and it would be about a 20% correction.<\/li><li>I have been saying that a 20% correction in the 1<sup>st<\/sup> half of the year was about as big a selloff that the bears might get this year. <\/li><li>I also said the Emini would probably rally in the 2<sup>nd<\/sup> half of the year. Will it make a new high? Probably, but it is too early to tell. The Emini instead might enter a trading range for the rest of the year.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Emini 5-minute chart and what to expect today<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Emini is down 30 points in the overnight Globex session.<\/li><li>Yesterday was a sell climax day. There is therefore a 75% chance of at least a couple hours of sideways to up trading today lasting at least a couple hours and beginning by the end of the 2<sup>nd<\/sup> hour. <\/li><li>The daily chart is the most oversold it has been since the pandemic crash. That reduces the chance of another big bear day today.<\/li><li>Traders know that most breakout attempts fail. That creates uncertainty and further reduces the chance of another big bear day today.<\/li><li>The bulls want the breakout below the 3-month range to fail. They would like today to be a strong buy signal bar. That means they want a big bull bar closing on its high. With  the market as oversold as it is, that might happen. But since the selloff has been so strong, a strong reversal up on the daily chart will probably need at least a micro double bottom. That means the selling will probably have to stop for a few days before the bulls can create a strong rally.<\/li><li>If the selling stops, today, which is likely, today will probably be a more neutral day. That means a lot of trading range trading. The bulls will try to get a reversal up and the bears will try to get a resumption of the bear trend. <\/li><li>The most likely outcome is that today will probably have at least one swing up and one swing down and be a mostly sideways day. <\/li><li>If today is neutral, it will probably close near the open. If it is 20 to 30 points from the open after 11 am, there will probably be a reversal toward the open at the end of the day. <\/li><li>The bears want at least a small bear body, which would confirm yesterday&#8217;s breakout and increase the chance of lower prices, even of the Emini bounces early next week.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Yesterday&#8217;s Emini setups<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash-680x383.png\" alt=\"Emini parabolic wedge buy climax then double top lower high major trend reversal and stock market crash. Emini at bottom of 3-month trading range.\" class=\"wp-image-142397\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash-1536x864.png 1536w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash.png 1920w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<p class=\"caption\">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).<\/p>\n\n\n\n<p class=\"caption\">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.<\/p>\n\n\n\n<p class=\"caption\">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.<\/p>\n\n\n\n<p class=\"caption\">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.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">EURUSD Forex market trading strategies<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">EURUSD Forex daily chart<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-higher-low-major-trend-reversal-and-micro-double-bottom.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-higher-low-major-trend-reversal-and-micro-double-bottom-680x383.png\" alt=\"EURUSD Forex higher low major trend reversal and micro double bottom\" class=\"wp-image-142414\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-higher-low-major-trend-reversal-and-micro-double-bottom-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-higher-low-major-trend-reversal-and-micro-double-bottom-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-higher-low-major-trend-reversal-and-micro-double-bottom-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-higher-low-major-trend-reversal-and-micro-double-bottom-1536x864.png 1536w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-higher-low-major-trend-reversal-and-micro-double-bottom.png 1920w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>The breakout above the 7-week trading range might be failing.<\/li><li>This week&#8217;s selloff fell back into the middle of the 7-week tight trading range. <\/li><li>Today so far is forming a micro double bottom with Wednesday&#8217;s low.<\/li><li>The bulls need another higher low and then a break above the January 14 high. If they get that, then the rally will probably last at least a couple months and reach the October 28 lower high.<\/li><li>The bears want the breakout to fail. They need a break below the January 4 higher low and then a break below the bottom of the 7-week range. If they get that, they will look for a measured move down.<\/li><li>I have been saying that the EURUSD would probably not continue down to last year&#8217;s low without first going sideways to up for a couple months. It went sideways. <\/li><li>Is that enough of a correction for the selloff to continue straight down? The bears have a 40% chance.<\/li><li>It is more likely that either the current bull breakout will continue up or that a break below the 7-week tight trading range will reverse up within a few weeks. The odds still favor that the EURUSD would rally for a couple months. <\/li><li>The nearest target for the bulls is the January 14 lower high and then most recent sell climax high, which is the October 28 high, just below 1.17.<\/li><li>Since the EURUSD is back its 7-week tight trading range, it might get stuck here for several more weeks.<\/li><li>However, another bear bar or two will make a break below the range likely.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Summary of today&#8217;s S&amp;P Emini futures price action and what to expect tomorrow<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-bottom-and-wedge-top-then-small-pullback-bear-trend-to-below-200-day-moving-average.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-bottom-and-wedge-top-then-small-pullback-bear-trend-to-below-200-day-moving-average-680x383.png\" alt=\"Emini wedge bottom and wedge top then small pullback bear trend to below 200 day moving average\" class=\"wp-image-142433\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-bottom-and-wedge-top-then-small-pullback-bear-trend-to-below-200-day-moving-average-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-bottom-and-wedge-top-then-small-pullback-bear-trend-to-below-200-day-moving-average-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-bottom-and-wedge-top-then-small-pullback-bear-trend-to-below-200-day-moving-average-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-bottom-and-wedge-top-then-small-pullback-bear-trend-to-below-200-day-moving-average-1536x864.png 1536w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-bottom-and-wedge-top-then-small-pullback-bear-trend-to-below-200-day-moving-average.png 1920w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">End of day summary<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Today sold off on the open to the 200-day MA, but there was a 75% chance of a reversal up after yesterday&#8217;s extreme sell climax.<\/li><li>Today reversed up strongly, but the rally ended with a wedge top at the December low. There was then an endless pullback and a tight range.<\/li><li>The bears got a breakout below the endless pullback in a Small Pullback Bear Trend, and today closed on its low.<\/li><li>On the daily chart, this has been a strong selloff from a wedge top. Traders expect at least a couple legs down. <\/li><li>The selloff is a Bear Surprise Breakout, which typically has a 2<sup>nd<\/sup> leg sideways to down and therefore another reason to expect a 2<sup>nd<\/sup> bear leg.<\/li><li>The selloff  broke below the December 3 major higher low. The daily chart therefore is now in a trading range and it probably is also in a bear trend.<\/li><li>The Emini closed below the 200-day MA today for the first time since early in the reversal up from the pandemic crash. Since it is important support, the Emini might rally sharply for a few days next week, especially after 4 big bear days.<\/li><li>On the weekly chart, this week was a big bear bar that broke far below the bull channel that began on October 30, 2020. <\/li><li>With the week closing near its low, next week might gap down. If there is a gap and the bears keep it open for a couple weeks, it could become a measuring gap. With this week&#8217;s low at about 400 points below the all-time high, a measured move down would be around the 4,000 Big Round Number.<\/li><li>The bears want at least a small bear bar next week to confirm the breakout. That would increase the chance of lower prices over the following weeks.<\/li><li>The bulls hope the breakout is just a bear trap. They want a strong bull reversal bar next week.<\/li><li>But after the wedge top on the daily chart and consecutive OO patterns in a buy climax on the monthly chart, traders should expect the Emini to be sideways to down for a couple months.<\/li><li>There is often a reversal up after a breakout. Therefore, the Emini might rally strongly for a week or two. <\/li><li>However, the selloff has been strong and it came from a wedge top on the daily chart. There should be a 2<sup>nd<\/sup> leg sideways to down on the daily chart, even if a rally first retraces half of the selloff.<\/li><li>Traders should expect lower prices over the next month or two.<\/li><li>On the monthly chart, January is an outside down bar after an outside up December.<\/li><li>This is an OO pattern, which means Breakout Mode. <\/li><li>It follows an OO pattern in October. Consecutive attempts at a top in a buy climax have an increased chance of a reversal down. <\/li><li>January is the sell signal bar for the OO.<\/li><li>February or March will probably trade below the January low, which would trigger the OO sell signal. <\/li><li>The minimum target is a measured move based on the height of the OO, which is January&#8217;s range. <\/li><li>That would lead to a test down to the October 3 low and possibly the gap above the March 2020 high on the monthly chart. That is also just below the 4000 Big Round Number. <\/li><li>If the selloff falls that far, it would be about a 20% correction, which is the likely worst case for 2022, barring surprises. For example, if Russia invades the Ukraine and many countries get involved, the Emini would probably fall much further.<\/li><li>There is currently a 30% chance that the Emini has begun a trading range for the next decade. The Emini is more likely to transition into the trading range over a couple years, like in 2000.<\/li><li>If the decade-long trading range has begun, its low will probably be around the Breakout Point of the 2-year rally. That is the March 2000 pre-pandemic high at around 3300, which is about a 30% correction.<\/li><li>More likely, traders should expect a rally in the 2<sup>nd<\/sup> half of the year since the 1<sup>st<\/sup> reversal down on the monthly chart should be minor.<\/li><li>Will there be a V-bottom, like in December 2018? Those are rare and therefore unlikely. The bulls will probably need some kind of double bottom before the trend up will resume.<\/li><\/ul>\n\n\n\n<p><em>See the <a rel=\"noreferrer noopener\" href=\"https:\/\/www.brookstradingcourse.com\/blog\/analysis\/\" target=\"_blank\">weekly update<\/a> for a discussion of the price action on the weekly chart and for what to expect going into next week.<\/em><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Trading Room<\/h2>\n\n\n\n<p>Traders can see the end of the day <a href=\"http:\/\/www.brookspriceaction.com\/profile.php?mode=profil&amp;sub=profile_prefer&amp;mod=0\" target=\"_blank\" rel=\"noreferrer noopener\">bar-by-bar price action report by signing up<\/a> for free at BrooksPriceAction.com. I talk about the detailed S&amp;P Emini futures price action real-time throughout the day in the BrooksPriceAction.com <a href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\" target=\"_blank\" rel=\"noreferrer noopener\">trading room<\/a>. We offer a <a href=\"http:\/\/www.brookspriceaction.com\/portal.php?page=11\" target=\"_blank\" rel=\"noreferrer noopener\">2 day free trial<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Charts use Pacific Time<\/h3>\n\n\n\n<p>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 <a href=\"https:\/\/www.brookstradingcourse.com\/blog\/market-update\/\" target=\"_blank\" rel=\"noreferrer noopener\">Market Update<\/a> page.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n","protected":false},"excerpt":{"rendered":"<p>Trading Update: Friday January 21, 2022 Emini pre-open market analysis Emini daily chart The Emini formed a big bear bar closing on its low and below the December 3 low yesterday. That is a break below the 3-month trading range. Today is the follow-through day. If it is another bear day, it will confirm the [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":142397,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"shadow","_genesis_layout":"","footnotes":""},"categories":[153],"tags":[281,60,84],"class_list":{"0":"post-142203","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-market-update","8":"tag-eurusd-forex","9":"tag-sp-emini","10":"tag-trading-range","11":"entry","12":"override","13":"shadow"},"featured_image_src":"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-parabolic-wedge-buy-climax-then-double-top-lower-high-major-trend-reversal-and-stock-market-crash.png","author_info":{"display_name":"Al","author_link":"https:\/\/www.brookstradingcourse.com\/pt-br\/author\/albrooks\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/142203","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/comments?post=142203"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/142203\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media\/142397"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media?parent=142203"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/categories?post=142203"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/tags?post=142203"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}