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Emini Far from Moving Average

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Trading Update: Wednesday November 22, 2023

S&P Emini pre-open market analysis

Emini daily chart

  • The Emini is far from the moving average in an overall trading range. This increases the odds that the market will have to get closer to the moving average before the market goes higher.
  • The Emini formed a doji closing at yesterday’s open, following Monday’s climactic bull breakout bar. Since Monday was climactic, the odds favor sideways trading for 1-3 days and a test of Monday’s low.
  • The bulls still expect a test of the September 1st high, the top of the bear channel.
  • The market can sell off to the moving average or go sideways which would drag the average price up to the current price level.
  • Even if the market sells off to 4,400 the odds will still favor a test of the September 1st top of the bear channel.
  • The market may hesitate under the September 1st high and go sideways. It is common for trading ranges to go sideways and under important resistance, making traders question if the market will go above the resistance level (September 1st) or if it will have to pull back first.
  • Overall, the odds favor sideways trading because the market is far away from the moving average.

Emini 5-minute chart and what to expect today

  • Emini is up 15 points in the overnight Globex session.
  • The Globex market rallied overnight and is testing near yesterday’s highs.
  • The bulls are likely disappointed by the overnight pullback and will look to take profits around yesterday’s Globex high.
  • Traders should expect today to have a lot of trading range price action, especially during the first hour of the U.S. Session.
  • Most traders should consider not trading for the first 6-12 bars, unless they are comfortable with limit order trading and making quick decisions.
  • Most breakouts fail on the open and lead to sideways trading. This means that traders must be careful on the open.
  • Most traders should focus on catching the opening swing that often begins before the end of the second hour. It is common for the market to form a double top/bottom, or a wedge top/bottom on the open. This means a trader can wait for the market to form one of the above patterns before trading.
  • Since tomorrow is Thanksgiving, today can be a slow day. Traders must trade the chart in front of them and not what they hope the market will do.
  • A trade is never overdue and forcing trades in a tight trading range is a quick path to having a loss.
  • The goal of a trader is to make money. To make money, one must avoid taking bad trades that have a poor trader’s equation. This means that a trader must be disciplined to not trade when the trader’s equation is weak.

Emini intraday market update

  • The Emini gapped and rallied for the first three bars of the day. The Bears got a strong downside breakout on bar 5, trapping the Bulls into a losing trade.
  • Although bar 5 was a strong bear trend bar, bars 1-2 lowered the probability of the bears getting a strong bear trend. This increased the odds of the day being a trading range day.
  • As of bar 51, the market is in a large triangle and breakout mode.
  • The odds slightly favor the bulls testing the bar 2 close before the end of the day. This is because it was reasonable to buy the bar 2 close. This means there is a 60% chance if a trader buys the close of bar 2 and is willing to scale in lower, they will be able to exit at the close of bar 2.
  • The market has not broken out of the 18-bar range. This will increase the odds that today will break out above the high of bar 3 or below the low of bar 10.
  • The most important thing to realize is that the market is in a triangle. If the probability favored one side, the market would not go sideways for so many bars.

Yesterday’s Emini setups

SP500 Emini 5 Min Chart Sell Climax and Then Trading Range

Al created the SP500 Emini chart.

Here are reasonable stop entry setups from yesterday. I show each buy entry bar with a green arrow and each sell entry bar with a red arrow. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a near 4-year library of more detailed explanations of swing trade setups (see Online Course/BTC Daily Setups). Encyclopedia members get current daily charts added to Encyclopedia.

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 formed a bear reversal bar after forming a second leg up following the November 11th upside breakout.
  • The bears are hopeful that the rally up to the November high has formed consecutive buy climaxes and that the market will sell off.
  • If the bears get the downside reversal, it will probably be limited. The November rally is tight, increasing the odds of a minor reversal.
  • Because the daily chart is in a large trading range, the market may test down to the November 6th high before the bulls are willing to buy again.
  • Overall, today’s selloff will likely lead to a minor reversal and sideways trading. If today is a strong bear trend bar closing on its low, that will increase the odds of the bears getting a second leg down.

Summary of today’s S&P Emini price action

SP500 Emini 5 Min Chart Buy Climax Opening Reversal Then Trading Range Day

Richard created the SP500 Emini chart (Al on Thanksgiving leave).

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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