Trading Update: Monday July 17, 2023
S&P Emini pre-open market analysis
Emini daily chart
- The Emini sold off last Friday as bulls began to take partial profits, following a strong rally during the week. The bears want today to disappoint the bulls and increase the odds of sideways trading.
- The rally last week was strong enough that the odds favor at least a small second leg up. This means there are probably buyers below, scaling in low.
- The bears are hopeful that any second leg will be brief and lead to a reversal down.
- If the bears will get a reversal down, they need to develop more signs of strength. At a minimum, the bears need to form 2-3 consecutive bear bars closing on their lows.
- The bulls are hopeful that any pullback below a prior bar will quickly find buyers and lead to trend resumption.
- Traders will pay close attention to see what kind of follow-through the bears can get today. If the bears can get a strong entry bar following last Friday’s bear bar, that will increase the odds that the bears can get at least a small second leg down.
- Overall, traders should expect any pullback to lead sideways to up trading.
Emini 5-minute chart and what to expect today
- Emini is down 2 points in the overnight Globex session.
- The 60-minute Globex market has been in a tight trading range for several hours.
- This will increase the probability of a trading range open.
- The bulls want an early low of the day and the market to form a bull trend of a trading range day.
- The bears want the market to form a bear trend during today’s session, which would form a bear entry bar on the daily chart after last Friday’s bear bar.
- As always, traders should expect a trading range open and the market to go sideways for the first 6-12 bars.
- Traders that want high probability should wait for a clear breakout with follow-through before placing a trade.
- If the day will have a lot of trading range price action, the day’s open will probably be important.
Emini intraday market update
- The Emini rallied, forming a bull trend from the open.
- While the rally appeared weak, it was a tight bull channel, a breakout on a higher time frame.
- Once traders began to realize that the channel was tight, most traders would wait for a strong bear trendline break of the bull channel, which happened around bar 36 (9:30 AM PT).
- The market went sideways for forming a triangle, and the bulls recently got a bull breakout of the triangle on bar 51 (10:45). Bar 51 was strong enough that it was likely to get a second leg up and possibly a measured move up based on bar 51 and 52.
- Bar 59 is climactic and will probably lead to some profit-taking.
- As for shorting around bar 59, most traders will likely wait for more selling pressure to develop.
Friday’s Emini setups
Al created the SP500 Emini charts.
Here are several reasonable stop entry setups from Friday. 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 a strong bull breakout with follow-through last week, closing above the May high.
- This is a strong enough breakout that the bulls will likely get a second leg up, even if there is a pullback first.
- At the moment, the odds favor a measured move up of the strong bull trend bars that formed late last week.
- Since the bulls have probability on their side, they must continue showing more signs of bullish strength.
- If the market begins to stall and build selling pressure, the probability can quickly fall to near 50% for both bulls and bears.
- The bears want the bulls to fail, leading to an endless pullback. However, they will need to develop more selling pressure before traders will be convinced that the bears can reverse the market.
Summary of today’s S&P Emini price action
Al created the SP500 Emini charts.
End of day video review
Here is YouTube link if video popup blocked:
Emini End of Day Review – Monday July 17, 2023 – Brad Wolff
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.
