Trading Update: Thursday May 23, 2024
S&P Emini pre-open market analysis
Emini daily chart
- The Emini is in a 5-day tight trading range far above the moving average.
- The market tested down to near the low of bar 17 and found buyers, causing yesterday’s bar to rally into the close.
- Yesterday was a bad stop entry buy above the bar, which increases the odds that there are sellers above.
- The problem the bulls have on the daily chart is that the market is far away from the moving average, forming a 5-day tight trading range.
- The odds favor a test of the moving average over the next several weeks. The market can reach the moving average by going down to it or sideways, dragging the moving average up to the current price.
Emini 5-minute chart and what to expect today
- Traders should pay attention to the open of the day as it will likely be an important magnet for most of the day.
- Traders should be patient on the open and consider waiting for 6-12 bars before placing a trade.
- Traders can also wait for a clear breakout with follow-through before placing a trade.
- The most important thing in the open is to be patient and open to any possibility. A trader only needs 2 to 3 decent trades a day. This means that traders do not need to place that many trades in order to achieve that goal.
Yesterday’s Emini setups
Al created the SP500 Emini charts.
Here are reasonable stop entry setups from yesterday. I show each buy entry bar with a green arrow and each sell entry bar with a red arrow. 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 reversed up during the early morning hours, testing near the May 22nd high.
- The selloff on May 22nd was strong enough for bulls to use today’s early morning rally to sell out of longs.
- The bears used today’s bounce to establish shorts. This led to the market reversing back down to the May 22nd low.
- The bears are hopeful that they are forming an endless pullback after the parabolic wedge top ending on May 16th. W
- The market is at the moving average, which was a credible magnet for the market to test.
- The bears want to get down to the May 15th low, which is the bottom of the most recent bull breakout.
- The bulls want a reversal up and test of the May 15th high close.
- Overall, the bears have not done enough to make it clearly Always In Short. This increases the risk that the market will have to pull back for a bar or two. A trading range is more likely than a strong bear breakout.
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.
