Trading Update: Friday November 11, 2022
Emini pre-open market analysis
Emini daily chart
- Emini surprise breakout testing 4,000 with market rallying over 200 points yesterday, a strong statement by the bulls.
- The bulls want today to have strong follow-through, increasing the odds of higher prices.
- The market is so close to the 4,000 big round number that it will probably have to test it in the next couple of trading days.
- The bears want to disappoint the bulls today and prevent a follow-through bar.
- Since the market was up over 200 points yesterday, it was a climactic rally, increasing the odds of a pullback for a few days. The odds favor higher prices; however, when you get a buy climax, the market often will need to “cool off” for a bar or two before the trend resumption can begin.
- The bulls are breaking out above the September 12 and November 1 double top. The bulls will want a measured move up, which would take the market to the 4,350 area. More likely, the market is in a trading range and will not race up to that price level.
- The bears want today to big a big bear bar and bad follow-through following yesterday’s breakout. While that is possible, the bears will likely be disappointed today.
- Traders will pay close attention to today and see if the bulls get strong follow-through.
- Overall, even if the market pulls back for a day or two, the odds favor at least a second leg up following yesterday’s strong rally.
- Today is Friday, so weekly support and resistance is important.
- Right now, the weekly chart is a bull bar closing on its high. The bulls want the market to close on its high, which would also cause the weekly chart to close above the high of the past several weeks. The bears want to create as big of a tail as possible on the weekly chart and close the week below the high of last week.
Emini 5-minute chart and what to expect today
- Emini is up 15 points in the overnight Globex session.
- The overnight Globex session has continued to channel up since yesterday’s close. However, it has been going sideways for several hours in a tight trading range.
- The open will likely have a lot of trading range price action as traders decide on the day’s outcome. As stated above, the bulls want follow-through today, and the bears want a bear bar, disappointing the bulls.
- Since the market rallied 200 points yesterday, today could be a bear-trend day, and the bulls would see it as a pullback on the daily chart.
- Traders should be open to anything today.
- If the market does have a bull trend from the open, traders should expect it to be limited and convert into a trading range day.
- Traders should pay extra close attention to the open of the day as it will likely be a magnet all day.
- As always, traders should wait for 6-12 bars before placing a trade. This market typically has a 50% chance of a major reversal or the open. Also, most breakouts fail on the open.
- Traders can also wait for a credible top or bottom swing trade. Typically, patterns can include a double top/bottom or a wedge top/bottom.
- Traders must also remember that today is Friday, which could be a surprise breakout up or down late in the day. If the market does have a surprise move late in the day, one must not be in denial.
- Lastly, traders must remember what Al often says, “price is truth.” This means one must trade the chart in front of them, not what they hope the market will do.
Yesterday’s Emini setups
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 EURUSD has done an awe-inspiring job over the past 24 hours.
- The bulls got a strong outside up bar yesterday, closing on its high. This bar closed above the past 62 bars and likely trapped bears into a bad trade.
- There are also trapped bulls who did not buy yesterday and need to find a way to get long.
- Several bulls bought yesterday’s close. Traders will pay attention to see if the bulls who bought yesterday’s close will scalp out today, creating a big tail, or they will hold long and continue to buy into the close of the week.
- The bulls have a chance to get consecutive strong bull trend bars, which would be a strong statement by the bulls.
- I have been saying for some time that the daily chart has been in a bear channel since mid-2021. Bear channels should be considered bull flags, meaning traders should expect an upside breakout. The reason for this is that channels usually convert into trading ranges.
- Nobody knows where the top of the range will be, but it could quickly get back to May 2022 or June 22 high.
- At the moment, yesterday’s breakout is strong enough to have at least a second leg up, which means traders will buy.
- The market is testing it’s 2017 low, so traders will pay attention to how the market responds.
- The weekly chart so far has a perfect looking bull body. Since today is Friday, weekly support and resistance will be important. The bulls want to day to close on its high and finish the week strong. The bears want to create as much damage as possible going into the final hours of the week.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day review
- I will update over the weekend and provide chart.
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
Traders can see the end of the day bar-by-bar price action report by signing up for free at BrooksPriceAction.com. Al talks about the detailed S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com on 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.
