Trading Update: Thursday October 26, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini, during the overnight Globex hours, is testing the midpoint (4,172) of the rally that began in October 2022. Assuming that the above price level would act as support was reasonable.
- The bulls will see the past today and yesterday as a second leg down after the three large bear trend bars last week. They want a reversal up today and a second entry buy.
- The bears are hopeful that the bulls who bought below Tuesday’s Low 1 are disappointed enough that they will exit on the first reversal up.
- The problem the bears have with selling at the current price level is that it is near a cluster of support, a 4,200 round number, and the 4,172 midpoint of the 2022 rally.
- traders will pay attention to today’s price action to see if bulls will get a reversal up today and a second entry buy.
- There are still trapped bulls who the October rally hoping for a second leg up. Those bulls will probably be able to above a loss scaling in lower. The market will likely rally and test near 4,300 to allow those trapped bulls out.
- If the market forms a strong reversal with follow-through over the next couple of days, bulls will consider holding long for a test of the October high.
- Overall, the Bears will probably be disappointed today, and the bulls will try and get a reversal up and test near Tuesday’s Low, which was a bad-looking Low 1.
Emini 5-minute chart and what to expect today
- Emini is down 10 points in the overnight Globex session.
- The Globex market sold off during the overnight hours and reached the midpoint of the rally that began in October 2022 and the 4,200 round number.
- Today is likely a trading range or bull trend day. This is due to the higher time frames for testing the important support mentioned above.
- While the odds are against a strong bear trend days, traders must not be in denial of the bears beginning to form trending behavior
- As I often say, the odds favor a trading range open. This means that most traders should consider not trading for the first 6-12 bars unless they are quick to make decisions.
- Most traders should wait for the opening swing that often begins before the end of the second hour after forming a double top/bottom or a wedge top/bottom.
- Lastly, traders should be prepared for a possible early low of the day. While the odds favor a bull trend or trading range day, traders must not be in denial of the price action. A trader must be prepared for anything, which means being ready for the exact opposite outcome of what they expect to happen.
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 formed a bear bar, closing on its low yesterday. The Bears are hopeful that the selloff over the past two days is strong enough for a second leg down.
- The bulls want the market to form a double top higher low major trend reversal with the October 13th low.
- With the strong selling over the past 2 days, the odds are that the first reversal will probably fail. However, because the market is in a trading range, the odds are that the bears will become disappointed by the selloff soon.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
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.
