Trading Update: Monday March 13, 2023
Emini pre-open market analysis
Emini daily chart
- The Emini had strong follow-through last Friday after the previous day’s bear breakout. The bulls want a strong bull close in order to disappoint the bears.
- The market is now back at the close of last year and will probably go sideways soon around this price level (3,895.75).
- Last week’s bear breakout was strong enough to increase the odds of another leg down.
- The bulls want last week to be a 2nd leg trap and lead to a reversal. While this is possible, the bulls will likely need to develop more selling pressure first.
- Traders should expect a pullback lasting a few days as bears begin to take partial profits. This means today will probably be disappointing for the bears. However, this does not mean the bulls will get a strong reversal up today.
- There are obvious breakout points above, such as the March 2nd low. Bulls likely bought this low, anticipating the selloff being a pullback from the March 2nd and March 3rd bull breakout.
- These bulls got trapped during the past two trading days and will likely use a test back to the March 2nd low to exit longs.
- While the bulls can argue that this is the early stage of forming a 2nd leg trap, with the first leg ending on March 2nd, most traders will need to see more buying pressure in order to conclude this. At a minimum, the bulls will probably need a micro double bottom or two – three strong bull trend bars.
- Even if the bulls can get a successful 2nd leg trap, there will probably be sellers around the high of March 6th or before it gets there. Since the bears see last week’s selloff as a surprise, they will sell the pullback. This increases the risk of sideways trading for several bars.
- Overall, last Thursday and Friday were strong enough breakouts to get a 2nd leg down, probably. This means traders will look to sell a pullback. However, the market may need to form a credible Low 2 short before the bears get their 2nd leg down.
Emini 5-minute chart and what to expect today
- Emini is down 40 points in the overnight Globex session.
- The Globex Market rallied yesterday and reversed sharply in the overnight trading hours.
- The bears want another strong bear close today on the daily chart. However, today will probably be disappointing for both the bulls and the bears.
- The market will likely have a gap down today. Since a gap down is the same as a bear breakout, traders should expect a 2nd leg down. Any reversal up on the open will likely fail to create a bull trend without the market at least forming a double bottom.
- As I often say, traders should expect a trading range open and consider not trading for the first 6-12 bars. This will help prevent a trader from getting trapped betting on breakouts in a limit order market.
- Most traders should focus on trying to catch the opening swing trade. It is common for a swing trade to begin after the formation of a double top/bottom or a wedge top/bottom. This means that a trader can often wait for one of the above patterns to form and have a reasonable chance of catching the opening swing trade.
- Overall, today will probably not be another bear-trend solid day. The market will probably try and get a bull close; this means that the open of the day will be an essential magnet. If the market is below the open, especially if not far from the open, traders will look for reversals up.
Emini intraday market update
- The Emini gapped down and rallied during bars 4 – 8. The rally was strong enough to make the market Always In Long and increase the odds of a 2nd leg up.
- The market went sideways for over an hour before getting a breakout and 2nd leg up on bar 18 (8:00 AM PT).
- Because of the hour-long trading range and the continuing trading range price action on Friday’s close, the market will likely continue sideways for some time.
- The bulls want an upside breakout above Friday’s Lower high at 12:00 PM PT.
- The 60-minute moving average (RTH/ES.D Chart) is not far above and the market may have to reach it sometime today.
- At the moment, the odds are that today will close above the open of the day. This means traders will look to buy selloffs, especially selloffs that are 2nd legs down or wedge bottoms.
- The bulls are forming open gaps, which increases the risk of a bull trend day. Traders should be mindful of these gaps. Open gaps trap counter trend traders, which increases the buying pressure.
Friday’s Emini setups
Al created the SP500 Emini charts.
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- The EURUSD is trying to get a close above the exponential moving average (blue line) and damage the argument of a bear trend.
- The market has had 24 out of 25 closes below the moving average, which is a sign of strong selling pressure. This will increase the market’s odds of transitioning into a trading range, not a bull trend.
- The bulls will probably get a couple of legs up soon, and the market will go sideways. One target for the bulls is a test of the February 14th high, which was the start of the bear channel.
- The bears will see any rally as forming a double top. Next, they will want a major trend reversal.
- The bulls will want trend resumption. However, they will need a clear, strong upside breakout above the February high to get this.
- Overall, traders should expect more sideways trading and confusion.
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
- Live stream video trial replacement of end of day review coming soon.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.