Trading Update: Monday April 25, 2022
Emini pre-open market analysis
Emini daily chart
- Emini bear breakout below wedge bottom.
- The bears now have two consecutive bear bars, one completely below the moving average.
- Right now, there is at least a 60% chance the bears will get some kind of measured move down.
- The bulls tried three times (1/24, 2/24, 3/14) to reverse up and failed. This increases the odds that the market will have to try to go down. Usually, when the market tries to do something and fails, it will have to try the opposite.
- The bears will probably reach the March 14 low. However, the bulls will try hard to defend the February low and prevent the market from falling below it.
- If the market gets below the February low, bulls will probably give up, and the market may get a bear breakout and measured move down based on the February – March trading range, which would take the market down to around 3,600.
- Since the February low is a credible bottom if the market falls below it, there is a 50% chance the market will fail to break below and reverse back into the February – March range.
- Overall, the bears have two big bear bars on the daily chart. They are probably strong enough to make the market Always In Short, and the odds favor a second leg down. The bulls hope today will be a strong bull reversal bar, reversing most of Friday. While that is possible, it is not likely. The market will likely go sideways to down for a couple of legs and reach the March 14 low.
Emini 5-minute chart and what to expect today
- Emini is down 8 points in the overnight Globex session.
- The Emini is likely to continue sideways to down to the March 14 low over the next several trading days, regardless if the bulls get a bounce.
- Thursday and Friday of last week were very climactic, meaning traders should expect a 75% chance of sideways trading for two hours today.
- While the market may get a third consecutive big bear close on the daily chart, it is not likely.
- Since the market is likely to gap down, traders should expect a test of the moving average and likely sideways trading.
- As always, most traders should wait for a credible stop entry or a breakout with follow-through before entering and consider not trading for the first 6-12 bars.
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 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 is currently breaking below the March – April trading range.
- The bears had a double top sell signal bar on April 2, and they are hopeful it will lead to a successful bear breakout and measured move down to 1.0430, which would be below the 2020 lows. The bears ultimately hope that this selloff will reach the 2017 lows.
- The bulls are hopeful today will disappoint the bears and set up a failed bear breakout, which is more likely.
- Traders will pay close attention to today’s close. If it closes on its low, traders might be willing to sell, betting on the breakout and more down. However, if today closes as a weak bear bar, especially if it closes above the lows of the past two weeks, bears may exit, which might cause a reversal.
- The bulls hope that this current selloff is a retest of the April 19 lows, setting up a lower low major trend reversal that will test the March high and ultimately test the February highs.
- Overall, traders should pay close attention to today’s intraday price action. There is potential for a strong reversal up today or tomorrow, which would be a failed breakout of the March – April trading range.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini charts.
End of day summary
- The odds favored the market going sideways for at least two hours today, which it did on the open.
- The bulls ended up getting a higher low major trend reversal that led to an endless pullback and strong rally into the close.
- Today created a strong bull reversal bar on the daily chart and is a reminder that the market is in a trading range on the daily chart.
- The bulls hope the buy signal bar on the daily will lead to a second leg trap and the bear want this to be a pullback from the two consecutive bear bars last Thursday and Friday
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.
