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Emini Breakout below February 10 Likely to Fail

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Trading Update: Tuesday February 21, 2023

Emini pre-open market analysis

Emini daily chart

  • Emini breakout below February 10th low on Friday is likely to fail, with reversal up.
  • The bulls see a second entry buy and want a failed breakout of the February 10th low.
  • The bears want any reversal up to be a pullback from the breakout below February 10th and for the market to reach 4,000 and the bottom of the bull trendline (October 2022 low, January 3rd).
  • The bulls want today to reverse up strongly and create a strong entry bar for last Friday’s (2/17) bull reversal bar.  If the bulls can get a strong reversal up, the first target would be the February 2nd high. Next, they would want a measured move-up based on February’s range.  
  • The bears want the opposite and a measured move down based on the February Range.

Emini 5-minute chart and what to expect today

  • Emini is down 35 points from Friday close in the overnight Globex session.
  • The Globex market has been in a tight bear channel since yesterday.
  • The bears are again trying to break below the February 10th low.
  • Traders should assume today will have a lot of trading range price action on the open. This means that most traders should consider not trading for the first 6-12 bars and assume the open will have a lot of limit order trading.
  • Traders can also consider waiting for a credible double top/bottom or a wedge top/bottom to form a swing trade. There is an 80% chance the open will form a swing trade, typically after forming one of the patterns mentioned above.
  • Overall, most traders should assume the day will be a trading range until there is a clear breakout with follow-through.

Emini intraday market update

  • The Emini gapped down and formed a trend from the open bear trend.
  • While the bears have done a good job forming a small pullback bear trend, there is a 60% chance that day will transition into a trading range day.
  • The bears want the market to get down to 4,000. However, that is probably too far away.
  • At the time of writing this (8:30 AM PT), the odds favor the formation of a trading range and a test of the moving average.
  • While it is possible that the bears can continue the selloff, it is unlikely without a couple of hours of sideways trading.
  • The selloff is becoming too climatic. This will attract profit-taking and aggressive bulls buying betting on sideways trading.  A lot of the bears that sold earlier will want first to see a credible pullback before they are willing to sell again.

Friday’s Emini setups

SP500 Emini 5-minute Wedge Top at EMA Then Midday Wedge Bottom. Emini breakout below February 10 likely to fail.

Al created the SP500 Emini charts.

Here are several reasonable stop entry setups from Friday (before Monday bank holiday and early market close). 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

EURUSD Daily Chart Wedge Bottom Expect Ten Bars Two Legs
  • The EURUSD broke below the moving average and is trying to reach the January 6th low.
  • The market has formed a wedge bottom in the past ten days and may have to rally for ten bars and two legs (TBTL).
  • The market is likely in a trading range, meaning bulls and bears will probably be disappointed.
  • The market will probably fall below the January low at some point soon. However, it must first form a lower high major trend reversal. Even if the bulls managed to get a new high above February, the odds will favor a trading range and more sideways.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

SP500 Emini 5-minute Chart Bear Trend From The Open then End of Day Trading Range

Al created the SP500 Emini charts.

End of day review

  • Live stream video trial replacement of end of day review coming soon.

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.

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