Trading Update: Thursday August 31, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini formed an upside breakout on August 29th and found follow-through buying yesterday. This is good for the bulls and increases the odds of higher prices.
- The bears are hopeful that the rally leading to yesterday’s high will become a 2nd leg trap in an overall trading range.
- More likely, the bulls will get at least a small 2nd leg up. This means that traders will buy and scale in lower.
- Since the market is in the middle of an overall trading range on the daily chart, there is an additional risk for the bulls buying at this price level.
- The bulls know there is an added risk of getting trapped in the middle of a trading range. While the odds favor a second leg up, bulls will be quick to exit longs if the bears are able to form a second entry sell.
- Overall, traders will pay close attention to the follow-through buying over the next few days. Traders should expect the bulls to become disappointed soon due to the market being in a trading range.
Emini 5-minute chart and what to expect today
- The overnight Globex market has gone sideways for the past several hours.
- Traders should expect a lot of trading range price action today during the U.S. Session.
- The bulls are hopeful that today forms an early low of the day and is another bull trend bar on the daily chart.
- More likely, today will disappoint the bulls and have a lot of trading range price action.
- Traders should expect the first 6-12 bars to go sideways. This means that most traders should consider using caution when trading during the first hour due to the probability of breakouts reversing.
- Most traders should try and catch the opening swing that often begins before the end of the second hour, after the formation of a double top/bottom or a wedge top/bottom.
- Traders should pay attention to yesterday’s close as well as the open of the day today. Both will likely be important magnets today.
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 formed consecutive bull bars, closing above the moving average. The market is likely Always In Long and will probably get a second leg up.
- The market formed a final flag (blue line), which is a triangle, back in August. The market will probably test the midpoint of the triangle over the next couple of weeks.
- The bears hope that they will be able to trap the bulls at the moving average. They hope that today is a big bear bar closing near its low.
- The downside is probably limited after the two strong recent bull bars.
- While the market is Always In Long, the upside is probably limited. The bulls formed a strong bull breakout yesterday (August 30th). However, there is a tail above the bar. This signifies hesitation and traders selling into the bar’s close.
- Overall, traders should expect a 2nd leg up after the rally over the past two days. Traders will pay close attention to see what kind of follow-through the bulls get today.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
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.
