Trading Update: Tuesday February 14, 2023
Emini pre-open market analysis
Emini daily chart
- Bulls strong follow-through wanted after Friday’s 2nd entry buy. Yesterday is a strong enough surprise breakout to expect at least a small second leg up.
- The bulls are trying to create a second leg trap following last Thursday’s large bear breakout. They want the selloff from the February 2nd high to be a bull flag and rally for a measured move up.
- The first target for the bulls is last Thursday’s high since it is the top of the 2nd leg trap (February 9th). The next target is the high of February. If the bulls can get a strong breakout above February’s high, they will try and reach the August 26th high, which is the top of a large bear channel.
- Yesterday was a problem for the bears. The bears expected a second leg down after Thursday’s bear breakout. While last Friday’s follow-through was bad, the bears still expect at least a small second leg down; therefore, some bears would sell above last Friday’s high, and they got trapped with yesterday’s upside breakout.
- Traders will pay close attention to today. The bulls want to get another bull close to try and force the bears to give up and buy back shorts. The bears will try their best to get a selloff today and minimize losing position.
Emini 5-minute chart and what to expect today
- Emini is up down 15 points in the overnight Globex session.
- The Globex market was in a bull channel for most of the overnight session until report.
- The 5:30 AM PT report created a big doji bar. This is a warning that the market may have a lot of trading range trading on the open of the U.S. Session.
- As always, traders should expect the first 6-12 bars to have a lot of trading range trading. This means most traders should consider not trading and wait for 6-12 bars before placing a trade.
- Traders can also consider waiting for a swing trade to set up. There is greater than an 80% chance of a swing trade beginning before the end of the 2nd hour. The swing trade usually begins after a double top/bottom or a wedge top/bottom. This means traders should consider looking for a strop entry trade after one of the patterns mentioned above forms.
- Overall, traders should assume the day will be a trading range day until the market is trending. This means traders should look to buy low, sell high, and scalp.
Yesterday’s Emini setups
Tim created the SP500 Emini chart from Al’s provided summary
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 market formed a 2nd entry buy yesterday, below the moving average.
- While the three-bar bear breakout that began on February 2nd was strong, it was still more likely to convert the market into a trading range, not a bear trend. This means that the odds favored buyers below the moving average.
- The bulls were willing to buy above the moving average for some time. This means that the bulls were happy to pay for more than the market viewed as average. Once the market begins to stall at the moving average, the bull would be more than happy to buy at a fair price.
- The bears know that the bulls were likely to buy at the moving average, and once the market started to stall, those bears began buying back shorts.
- Most traders expect some kind of Lower High Major Trend Reversal to form; without it, they will likely expect the market to go sideways.
- Traders will pay close attention to see what kind of follow-through bulls can get after a reasonable 2nd entry buy below the moving average.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Tim created the SP500 Emini chart from Al’s provided summary
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
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.
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.
Hi,
Thanks for the analysis. Can you tell me what is the measured move from the open based on please?
Hi Rob – good question – traders are looking for a swing on the open – we are below the MA so bears will usually sell again at the MA – you see the tails on the bar… and then wooshka – trend bar up – so bulls will set a new target from that BO gap, called a measuring gap… experienced bears (not us) will sell a MM above as well trying to bring their loss down – does that help?
Thanks for explaining that Tim – it is helpful. I find that MMs are the hardest for me – definitely something that I have to work on. So the tail on the bull bar at the MA and the following bull doji are counted as a pullback and the MM is the first leg of the move to that pullback?
I have been going through the daily setups which has been very helpful but as I said I need to work on the MMs. I find them pretty hard to pin down at the end of the day and even harder when trading in the moment especially with the number of ways to draw it. Wouldn’t it be better to draw it using the bodies of the first bull body to the close of the bull doji at the MA? Then the MM target is reached rather than being higher than the move? How would you handle taking profit? Exit once it doesn’t hit the target with a large tail on a bar near it like here?
Hi,
why are Bar 2 and 3 strong buys? Gap down and resistance above – open of day and EMA made me think: wait for something stronger like a double bottom. Okay buy, but strong buy as marked in the “daily setups”?
Hi Hartmut – good question also – my read was the day before was bull trend day – and most moves on the open reverse – we immediately moved to a 50% pullback from YD and got a tail below…weak bear bar so bad sell… for me that’s a strong buy.. then we get a strong bull bar to get with trend… call it a DB bull flag. Yes i agree typically wait for a DB, which you got if you waited 27 bars later – I agree with Al on finding the reliable swing setups for 40% chance at 2:1+ – how did you go?
Thank you very much, Timothy. Your answer helped a lot! I only took one scalp yesterday late during the first bull move. Still so much to learn….
thx Tim w2g
Is Tim starting mark-up the members BTC Daily Setups blue box trades then , rather just Al.
No. Al gave Tim a draft chart with setups marked up for Tim to complete, and myself to proof and publish. 🙂
Al is still maintaining the Encyclopedia himself.