{"id":143122,"date":"2022-02-02T06:20:00","date_gmt":"2022-02-02T14:20:00","guid":{"rendered":"https:\/\/www.brookstradingcourse.com\/?p=143122"},"modified":"2022-02-02T20:12:33","modified_gmt":"2022-02-03T04:12:33","slug":"emini-2022-v-bottom-rally","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/pt-br\/analysis\/market-update\/emini-2022-v-bottom-rally\/","title":{"rendered":"Emini 2022 V-bottom rally might stall soon"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Trading Update: Wednesday February 2, 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 reversed up strongly last week from below the October low, which was the bottom of the 6-month trading range. But the V-bottom rally might stall soon.<\/li><li>The January selloff was also a test of the 200-day MA and the bottom of a bull channel on the weekly chart. The bottom of the channel is a line that is parallel to the top of the channel and then attached at the March 3, 2020 pandemic low.<\/li><li>Last week, I said that there would be a rally lasting at least a couple weeks and going above the December 3 low. That was the most important breakout point on the way down. When the market is in a trading range, there is usually a pullback beyond breakout points.<\/li><li>Traders are deciding if the rally will continue up to a new high without more than a 3-day pullback (V-bottom, like December 2018 and the pandemic bottoms), or if there will be a 2<sup>nd<\/sup> leg down.<\/li><li>The rally is strong enough to continue up in a V-bottom reversal. <\/li><li>However, there are 2 problems with this. First, the Emini is still in a trading range, and most legs up and down disappoint traders expecting a trend. Most strong legs reverse.<\/li><li>Next, the January selloff was unusually strong. That makes at least a small second leg sideways or down likely. <\/li><li>However, if there are several more big bull days over the next couple of weeks, the odds will favor a V-bottom reversal up to a new high.<\/li><li>Remember, I have been saying that the Emini should sell off early in 2022 and then rally to a new high later in the year. That is still true, but the new high could come within a couple months if the rally continues up.<\/li><li>On the monthly chart, there are now consecutive OO patterns in a bull trend. Also, January closed below its midpoint. These factors increase the chance of a 2<sup>nd<\/sup> leg sideways to down, possibly to the 20-month EMA and the 4,000 Big Round Number. <\/li><li>With January closing in the middle of its huge range, there is an increased chance February will be an inside bar on the monthly chart. It might even have a bull body.<\/li><li>Unless February is a big bull bar, traders should expect a 2<sup>nd<\/sup> leg sideways to down, like in the 2018 October to December pullback.<\/li><li>What about a crash? Crashes are rare so don&#8217;t worry about them. <\/li><li>The best the bears will probably get is a test below the 4,000 Big Round Number this year. That would be about a 20% correction. <\/li><li>They currently have a 50% chance, but the odds will drop quickly if the rally continues up for another week or two.<\/li><li>3 consecutive bull bars is becoming extreme. Also, the Emini is back to the 20-day EMA and a 50% retracement of the January collapse. These factors increase the chance of some profit taking and 2 to 3 days sideways to slightly down trading starting soon. <\/li><li>The bears want a resumption of the bear trend. <\/li><li>If Russia invades the Ukraine, there will probably be a 2<sup>nd<\/sup> leg down. But they won&#8217;t consider invading until late February, after the Winter Olympics. Otherwise, they will lose China&#8217;s political support.<\/li><li>The concern over the invasion is an overhang that should prevent the rally going straight up to a new high during the Olympics. <\/li><li>However, the reversal up is strong and there is no sign of it pausing. Traders are betting on at least slightly higher prices.<\/li><li>Since there are now 3 consecutive bull days and the daily chart is still in a trading range, there will probably be a 2- or 3-day pause or pullback soon. The Emini might even go sideways until after the Olympics. At the moment, odds favor at least a little higher.<\/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 up 28 points in the overnight Globex session.<\/li><li>Today is the 4<sup>th<\/sup> day in the bull trend reversal. Traders have been buying aggressively and they might buy more again today.<\/li><li>However, the daily chart is still in a trading range, and a 4<sup>th<\/sup> big bull day would be fairly climactic. The bulls will probably take profits within a few days. That should result in a few sideways to down days.<\/li><li>Yesterday was in a tight trading range for most of the day. It came 3 days into a rally, which is late. It therefore might be the Final Bull Flag, and it is therefore a magnet below.<\/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\/02\/Emini-wedge-opening-reversal-then-trading-range-with-late-bull-breakout-680x383.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-opening-reversal-then-trading-range-with-late-bull-breakout-680x383.png\" alt=\"Emini wedge opening reversal then trading range with late bull breakout. Emini V-bottom rally might stall.\" class=\"wp-image-143251\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-opening-reversal-then-trading-range-with-late-bull-breakout-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-opening-reversal-then-trading-range-with-late-bull-breakout-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-opening-reversal-then-trading-range-with-late-bull-breakout-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-opening-reversal-then-trading-range-with-late-bull-breakout.png 960w\" 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\/02\/EURUSD-Forex-reversal-up-from-failed-bear-breakout.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURUSD-Forex-reversal-up-from-failed-bear-breakout-680x383.png\" alt=\"EURUSD Forex reversal up from failed bear breakout\" class=\"wp-image-143277\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURUSD-Forex-reversal-up-from-failed-bear-breakout-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURUSD-Forex-reversal-up-from-failed-bear-breakout-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURUSD-Forex-reversal-up-from-failed-bear-breakout-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURUSD-Forex-reversal-up-from-failed-bear-breakout.png 960w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>The EURUSD Forex market reversed up from below its 9-week tight trading range after failing to breakout above it in mid-January. <\/li><li>Today so far is the third consecutive bull day and the EURUSD is just above a 50% retracement of the last leg down.<\/li><li>The next magnet for the bulls is the January 20 lower high, which was the start of the parabolic collapse at the end of the month.<\/li><li>Yesterday was a bull day after Monday&#8217;s big reversal up. That follow-through increases the chance of at least a small 2<sup>nd<\/sup> leg sideways to up. <\/li><li>The bears are hoping the this week&#8217;s bounce will form another lower high in the yearlong bear channel.<\/li><li>The bulls want the reversal up to be the start of a bull trend lasting several months.<\/li><li>But they will need many more bull trend bars and a strong break above the January 14 lower high before traders will believe that a significant bottom is in. Until then traders will continue to bet on new lows.<\/li><li>Part of the reason behind the selloff from the January 14 lower high is the fear that Russia will invade the Ukraine. But as I wrote above, Russia will not consider invading until after the Olympics, which means late February. <\/li><li>This takes pressure off for a couple weeks, which should slow the selling, or result in a return to the middle of the 9-month trading range.<\/li><li>Since there is still uncertainty about the invasion, the EURUSD will probably be mostly sideways for a few weeks.<\/li><li>The yearlong selloff on the monthly chart has not been as strong as the 2020 rally. It is more likely a pullback from that rally and not a resumption of the 14-year bear trend. Therefore, the bulls should get a rally lasting several months starting within a few months.<\/li><li>Is this the start? The bulls need a strong breakout above a major lower high, like the January 14 high, before traders will conclude that the daily chart has begun a bull trend. <\/li><li>At the moment, the bear trend has paused for several months. It has not yet clearly ended.<\/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\/02\/Emini-wedge-bottom-and-then-wedge-top.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bottom-and-then-wedge-top-680x383.png\" alt=\"Emini wedge bottom and then wedge top\" class=\"wp-image-143300\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bottom-and-then-wedge-top-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bottom-and-then-wedge-top-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bottom-and-then-wedge-top-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bottom-and-then-wedge-top.png 960w\" 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>After a gap up, the Emini sold off for a couple hours back down to yesterday&#8217;s close.<\/li><li>It then rallied from a wedge bottom in a Small Pullback Bull Trend to above the January 10 low.<\/li><li>It reversed down sharply into the close to below the open of the day. <\/li><li>Today was a bear bar in a buy climax on the daily chart. That increases the chance for a pullback over the next few days.<\/li><li>However, bulls will buy the pullback for at least a small 2<sup>nd<\/sup> leg up after this week&#8217;s strong rally.<\/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 on <a href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\" target=\"_blank\" rel=\"noreferrer noopener\">trading room<\/a> days. 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: Wednesday February 2, 2022 Emini pre-open market analysis Emini daily chart The Emini reversed up strongly last week from below the October low, which was the bottom of the 6-month trading range. But the V-bottom rally might stall soon. The January selloff was also a test of the 200-day MA and the bottom [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":143251,"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":[281,60,335],"class_list":{"0":"post-143122","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-v-bottom-pattern","11":"entry","12":"override","13":"shadow"},"featured_image_src":"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-opening-reversal-then-trading-range-with-late-bull-breakout.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\/143122","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=143122"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/posts\/143122\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media\/143251"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/media?parent=143122"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/categories?post=143122"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/pt-br\/wp-json\/wp\/v2\/tags?post=143122"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}