Trading Update: Tuesday September 6, 2022
Emini pre-open market analysis
Emini daily chart
- Last Friday was a big bear trend bar that almost went outside down with Thursday’s low.
- The market is trying to form a bottom with the July 28 low. The bulls want a strong buy signal bar today, which would be a second entry buy.
- The odds are that the year’s low is in, and the market will not fall below the June 17 low before the year.
- Friday went above the bear microchannel that ended on September 1st. The odds were the first reversal up would fail, which it did.
- The bulls want a head and shoulders bottom here, the same as a higher low major trend reversal.
- The bears will likely have difficulty driving the market much lower as there are several support areas near the current price. Some of these levels are the July 26 low and June 28th breakout points and the July 8th breakout points. These price levels are logical areas for bulls to initiate longs and bears to take profits.
- The daily chart is in a trading range. This means traders should expect the bears to be disappointed soon, just like the bulls were disappointed with the deep pullback from the August 16th rally.
- The bears want a continued selloff down to the June 17th low, but they probably will not get it, and the market will bottom soon.
- The bulls want a higher low and a test of the August 16 high. The bulls need to show signs of buying pressure for traders to begin buying aggressively. The bulls need strong consecutive bull trend bars, with both bars having big bodies and, ideally, the second bar closing above the first.
- Overall, traders should expect a bounce over the next few days, but as I said above, the bulls need to prove that they are strong before many traders are eager to buy. The market is just under the 4,000 big round number and may oscillate around that price.
Emini 5-minute chart and what to expect today
- Emini is up 24 points in the overnight Globex session.
- The Globex market has been in a broad bull channel for the entire overnight session.
- The bulls want the market to gap up today and close as a big bull trend bar which would disappoint bears on the daily chart.
- As always, traders should expect a limit order open and sideways.
- Most traders should wait 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 want a strong breakout with follow-through.
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD tried to break out below the 9-day trading range yesterday and failed.
- Bulls have done an excellent job developing the buying pressure, which increases the odds of sideways up here and that any bear breakout will fail to get far.
- The bulls had a weak signal bar yesterday (doji buy signal bar), so they need a strong entry bar today to compensate for it.
- The bulls see yesterday as a lower low major trend reversal; however, with the signal bar being a bar, many bulls may wait for 2-3 consecutive bull bars closing on their highs and above the moving average before buying.
- The bears want a continued spike and channel down after the selloff down to August 23; the bears failed to break far below the July 14 low so that the market may view this current selloff as a failed breakout below the July – August trading range.
- Overall, most traders will wait to see how strong the bulls are here. While the odds favor higher prices and a test soon to fill the gap from the July 27th low, most traders want to see more from the bulls before buying.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Al created the SP500 Emini charts.
End of day review
- Today was a parabolic wedge bottom that led to a trading range.
- Friday ended with consecutive sell climaxes, so on today’s open, there was a 75% chance of a trading range for 2 hours beginning before the end of the 2nd hour. There was a 50% chance today’s open would have follow-through selling first and 2 hours of sideways trading.
- While the rally up to 8:15 PT was strong, the bulls also lacked strong uniform bars. There were several strong-looking bull bars, but follow-through after the breakout bars were weak.
- The market formed a double top and a wedge top for the second leg at 8:45 PT.
- The bear breakout at 9:10 was strong, but the bears’ problem was that the downside was likely to be limited after the rally up to 8:15.
- At this point, the market had a big down and an up, which increased the odds of a trading range.
- The market continued sideways in a triangle for the rest of the day.
- Overall, today was good for the bears. However, the market is at support. This increases the odds of a bounce up soon, a test of the September 1st high and an examination of the 4,000 big round number.
- No Video for today; however, more to follow. If you want a complete end of day review, go to the brookspriceaction.com website, where you can subscribe to the trading room. There, you will find the recording for today’s webinar and a complete End of day video summary.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.