Emini Likely to Reach August 18 Low

Trading Update: Tuesday September 26, 2023

S&P Emini pre-open market analysis

Emini daily chart

• The market is reversing up and attempting to test the August 18^th low.
• The Bulls hope this will lead to a successful 2^nd leg trap. More likely, the best the bulls will be able to achieve is a trading range.
• The Bulls need to develop more buying pressure to convince traders they are taking control. Until then, the odds favor sellers above and a trading range or a bear flag.
• Over the next few days, traders will pay close attention to the August 18^th breakout point low. The bulls want to break above the August 18^th low to relieve the trapped bulls.
• The bears want the opposite, and for the market to fail to reach the August 18^th low and force the bulls to sell out their longs.

Emini 5-minute chart and what to expect today

• The Globex market is in a tight trading range and has gone sideways for most of the overnight session.
• The market is in breakout mode on the Globex 60-minute chart and is deciding on a breakout up or down.
• Yesterday’s high will likely be a magnet, and the day’s open during the U.S. Session.
• As always, traders should assume an 80% chance of a trading range open and only a 20% chance of a trend from the open.
• This means that most traders should consider not trading for the first 6 – 12 bars unless they are comfortable scalping with limit orders.
• Most traders should try and catch the opening swing that often begins before the end of the second hour. It is common for the opening swing to start after forming a double top/bottom or a wedge top/bottom. This means most traders can wait for one of the above patterns and have a reasonable stop-entry trade with good risk/reward.

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 near 4-year library of more detailed explanations of swing trade setups (see Online Course/BTC Daily Setups). Encyclopedia members get current daily charts added to Encyclopedia.

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 closed below the May 31^st low for the first time. This indicates that the bears are getting a successful breakout below the May low.               
• However, the bear channel is climactic and has not touched the moving average for 17 bars. This is also happening late in the selloff that began back in July.
• Although the bear channel is climactic, it is also tight. This increases the odds that the first breakout above the channel will fail.
• The bears are trying to get a bear breakout below the bear channel and major support. The odds are that yesterday’s bear breakout will probably fail, leading to a trading range.
• It is important to realize that the bear channel that began in July is a breakout on a higher time frame, such as the monthly chart.
• The monthly chart formed a bull breakout of a bear trend ending in July 2022. The bulls likely need a credible major trend reversal to transition the monthly chart into a bull trend. This means the EURUSD could fall back to 1.0000 before the buyer arrives.
• Overall, while the daily chart is in a tight bear channel that is a breakout on a higher time frame, the daily chart will likely begin to go sideways for several days and develop into a trading range. Traders will probably disappoint the bears and try to reverse and test yesterday’s high and the moving average.

Summary of today’s S&P Emini price action

Al created the SP500 Emini charts.

End of day video review

End Of Day Review will be presented in the Trading Room today. See below for details on how to sign up.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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Trading Room

Al Brooks and other presenters talk about the detailed Emini price action real-time each day in the BrooksPriceAction.com trading room days. We offer a 2 day free trial.

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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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