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Emini bulls likely disappointment today

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Trading Update: Friday May 27, 2022

Emini pre-open market analysis

Emini daily chart

  • The market reached the May 2nd low (4,056) and will probably get to the February 24th low (4,094.50) soon.
  • The bulls probably need one more strong bull trend bar to convince traders that the bulls have regained control as they did on March 17 or March 18.
  • Bulls need one more bar, but today may see bulls likely disappointment and not get their one more bull trend bar.
  • The bulls have had a strong rally this week so far on the daily chart.
  • The bulls got a close above the 20-period moving average for the first time since April 20th. This is an indication of a strong bear trend.
  • The bulls hope that the rally from May 20th is strong enough to make the market always in long and break above the May 17 high.
  • More likely, the channel down from the all-time high is tight enough that the first reversal will be minor and begin to go sideways. This means that the odds favor the bulls becoming disappointed soon and possibly with today’s close.
  • Overall, traders should expect sideways over the next couple of days. The rally up from May 20th is strong enough that even if the market gets a 50% pullback from the May 26th high to the May 20th low, the odds will still favor buyers below.

Emini 5-minute chart and what to expect today

  • Emini is up 35 points in the overnight Globex session.
  • Note, I am traveling, so I am typing the report early, 5 hours before the day session opens.
  • Today is Friday, so weekly support and resistance are important.
    • It looks like this week will be a big bull bar closing near its high, and the bulls will try hard to accomplish this.
    • Bears will try hard to get the weekly chart to close below the week’s midpoint, which is around 3,972.
    • Since today is Friday, it is important to remember that there is an increased risk of a strong breakout up or down in the final few hours of the day. This is due to institutions fighting over the close of the weekly chart.
  • As always, traders should expect the market to go sideways on the open and have a lot of trading range trading.
  • If today is going to be a strong trend day, there will be plenty of opportunities to enter in the direction of the trend, just like there was yesterday during the first 11 trend bars.  
  • Traders should also be cautious about not being too quick to enter on the open since most breakouts fail.
  • Most traders should wait for a credible stop entry, such as a micro double top/bottom or a wedge top/bottom.
  • Also, If a trader does have trouble on the open, they should consider waiting for 6-12 bars before placing a trade.

Yesterday’s Emini setups

Emini small pullback bull trend from the open then parabolic wedge top with pullback to the EMA where there was a 20-Gap Bar buy and a Moving Average gap bar buy. Bulls likely disappointment Friday.
Above is the version that I post every day. Because I often get questions about what Daily Setups chart
Encyclopedia members see, today I am including the example below of that version.
Brooks Encyclopedia Small Pullback Bull Trend From The Open Then Trading Range

Al created the SP500 Emini charts.

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

EURUSD Daily Bears Want 2nd Leg Trap
  • Note, I am traveling, so I am typing the report early, 5 hours before the day session opens.
  • Today is Friday, so weekly support and resistance are important.
    • It looks like this week will be a big bull bar closing near its high, and the bulls will try hard to accomplish this.
    • Since today is Friday, it is important to remember that there is an increased risk of a strong breakout up or down in the final few hours of the day. This is due to institutions fighting over the close of the weekly chart.
  • As always, traders should expect the market to go sideways on the open and have a lot of trading range trading.
  • If today is going to be a strong trend day, there will be plenty of opportunities to enter in the direction of the trend.  
  • Traders should also be cautious about not being too quick to enter on the open since most breakouts fail.
  • Most traders should wait for a credible stop entry, such as a micro double top/bottom or a wedge top/bottom.
  • Also, If a trader does have trouble on the open, they should consider waiting for 6-12 bars before placing a trade.

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

  • Al will post chart after the close.
Emini bull trend from the open and then a triangle breakout and trend resumption up

Al created the SP500 Emini charts.

End of day summary

  • Friday was a bull trend from the open that had a late trend resumption up.
  • The market tried to form a parabolic wedge top around 7:25, however, the reversal was minor, and the market led to a two-legged correction down to the moving average.
  • There was a 60% chance the market would go sideways into and form a trading range which it did during the middle of the day.
  • A trend from the open typically has a 60% forming a trading range and only a 20% chance of continuing as a strong trend from the open for the entire day.  While today was a strong trend day closing on its high, today did go sideways for over 3 hours, meeting the 60% requirement of forming a trading range.
  • The market formed a triangle during the middle of the day and entered breakout mode. The bulls wanted trend resumption up, and the bears wanted trend reversal.
  • The odds slightly favored trend resumption since the market was in a prior bull trend before forming the tight trading range. Also, the market was holding above the moving average.
  • Even though the market formed a tight trading range, it is important to note that the bears only got 2-3 closes completely below the moving average all day, demonstrating a strong bull trend.
  • The bull ended up getting trend resumption into the close around 12:10 PT.

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.

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