Trading Update: Tuesday September 20, 2022
Emini pre-open market analysis
Emini daily chart
- Emini market is reversing up and testing breakout point of the September 6 low. This is probably the start of a couple of legs sideways to up.
- The bears will try and keep the September 6 breakout gap open, however, it will probably close since the market is in a Trading Range.
- The market may have to get up to 4,000 before sellers come back in.
- The bulls have a wedge bottom (8/24, 9/6, and 9/16); this increases the odds of two legs up.
- The bulls had strong buying pressure on the rally up to September 12; some of those bulls that bought got trapped by September 13 and bought lower, looking to exit the entire trade at breakeven. This will also increase the odds of a deep pullback to allow those scale-in bulls out break even.
- Since the market is in a trading range, traders should not be surprised if the rally reaches back to the September 12 close.
- The bears want a continued channel down; however, with all the buying pressure over the past ten trading days increases, the odds of more sideways rather than down.
- Overall, traders should expect a few legs sideways to up and a test of the 4,000-price level.
Emini 5-minute chart and what to expect today
- Emini is down 30 points in the overnight Globex session.
- The market sold off during the overnight Globex session.
- While the market will probably have at least a small gap down, traders should be open to a possible early reversal up in the form of a double bottom or wedge bottom. Traders should also be open to market going sideways to the moving average and an opening reversal down in the form of a double or wedge top.
- Traders should expect a limit order market, so they should consider waiting for 6-12 bars before placing a trade.
- Traders can also wait for a clear always-in breakout with follow-through breakout above/below support or resistance.
- Overall, the most important thing is to trade the market in front of you and not deny what is happening.
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 bulls have done an excellent job getting four consecutive bull bars. However, they are all dojis with small bodies. This increases the odds that the bears will get their second leg down from the September 13 breakout.
- Traders will pay close attention today to gauge how strong the second leg down will be.
- If today is a big bear trend bar, it will increase the odds of follow-through tomorrow. Even if today is a bear trend bar closing on its low, it will likely have disappointing follow-through for the bears and lead to more sideways trading.
- With the four consecutive bull bars increase, the odds that this second leg down will be brief and likely get bought.
- Overall, traders should expect limited downside and a sideways to up rally testing the August high soon.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day review
- Today was a trading range day that reversed after testing last week’s low.
- The market sold off and formed a wedge bottom around bar 7:30 PT and reversed up, testing the open of the day.
- The bulls tried to break above bar 1 during the 9:00 PT breakout. However, the selloff from the first 12 bars was too strong, which increased the odds of going sideways.
- The bull breakout around 9:00 was also a wedge top that led to a bear breakout and measured move down to the day’s low.
- The bears tried hard to break far below last week’s low but failed, and the market reversed.
- The bulls got a buy-the-close rally before 12:30 that tested the open of the day.
- When you get a buy-the-close rally that starts before 12:30, there is an increased risk of the rally not lasting until the end of the day, which is why the market sold off during the final 3 bars of the day.
- Overall, today was a failed breakout below last week’s low, and the day closed around the open. The bulls will want tomorrow to gap up and lead to an intense bull trend day. The bulls will probably get to 4,000 over the next couple of weeks.
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.
