Trading Update: Friday July 8, 2022
Emini pre-open market analysis
Emini daily chart
- The odds are beginning to favor the bulls. Emini bulls upside breakout wanted, a test of 4,000 and ultimately a test of the June major lower high.
- The daily chart now has five consecutive bull bars and is testing the June 24th close.
- The bears want the market to form a double top with the June 28 high and need to test back down to the June 16 low.
- Bulls have gotten intense buying pressure (strong bull bars) all the way down since the April high. The bulls have nine bull bars out of the past 12 bars, which is another sign of bull strength.
- Traders will pay attention to see if the bulls will be able to get a strong bull breakout on the daily chart closing above the June 28 high, or will the bulls be disappointed soon, which would remind traders that the market is still in a trading range.
- Today is Friday, so weekly support and resistance are important.
- So far, the weekly chart is a bull bar closing on its high. The bulls will try hard to have the market close at the high of the week, and bears will do their best the create as big of a tail as possible on the weekly chart to disappoint the bulls.
Emini 5-minute chart and what to expect today
- Emini is down 15 points in the overnight Globex session.
- The market is below yesterday’s close and has been in a trading range for most of the overnight Globex session.
- Traders should expect a trading range open and limit order market.
- If a trader has trouble trading the open, they should consider waiting for 6-12 bars before placing a trade.
- Traders can also wait for a credible stop entry such as a double bottom/top, wedge bottom/top, or a strong breakout with follow-through.
- Since today is Friday, there is the increased potential of a strong breakout up or down late in the day as traders decide on the close of the weekly chart.
Yesterday’s Emini setups
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
- The EURUSD is likely to bounce over the next couple of days.
- The market now has three consecutive bear bars; however, the third bar is smaller, indicating that the market may pull back to test the 2017 low.
- The market is also in a 9-bar bear micro channel, so the first reversal up is probably minor.
- Even though the odds favor a second leg down following the July 5 – 6 bear breakout, the odds are the market will have to test the 2017 low soon. Some bulls bought the low and scaled in lower, and they will probably be able to exit their long positions back at the 2017 low.
- The 9-bar bear micro channel is climactic, increasing the odds that the market will have to bounce soon.
- Some bulls who bought the 2017 low and scaled in lower will be disappointed enough that their goal is now to avoid a loss rather than to make a profit by exiting back at the 2017 low. This means the market may stall under the 2017 low.
- The bears want the overall broad bear channel to continue to form lower prices. However, odds favor a test back to the midpoint of the two-month trading range (May – June).
- Today is Friday, so weekly support and resistance are important. The midpoint of this week is 100 pips above the current price, and the market is not likely to reach it today.
- The bulls will try to create as big of a tail as possible to disappoint the bears. Bears want the opposite and will try their best to close this week’s bar on its low.
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
- Today was a parabolic wedge bottom that led to a trading range day.
- The market reversed up on the open but failed on bar three at the moving average leading to a selloff and wedge bottom.
- The bulls broke above the moving average around 7:30 PT and formed a strong buy the close market that formed a wedge top (around 8:45) just above yesterday’s high.
- The bears broke below the double bottom (green line around 9:30) and got a measured move down based on the double bottom (9:45).
- 10:00 was a test of the open of the day and a micro wedge bottom at support (measured move target based on an earlier bear breakout below the double bottom. The bulls got a rally into the close that failed back at the high of the day and led to a selloff into the close.
- One thing to note, when you get a buy the close market before 12:30, it often has a hard time continuing into the close. With the market stalling at resistance (high of day (blue line) and the buy the close likely exhausted, the odds favored a pullback into the close.
- Overall, today, another bull close on the daily chart; however, the late selloff at the end of the day created a tail on top and made the bar disappointing for the bulls. The market will probably have to have a pullback soon on the daily chart since today was the sixth consecutive bull close.
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.
