Trading Update: Friday September 9, 2022
Emini pre-open market analysis
Emini daily chart
- The market formed a double bottom with the July 26 low, with two consecutive bull bars closing on their highs. This is good for the bulls, but they need more as bulls want strong finish to week.
- The market will probably have to rally to the August 24 low and fill this gap soon. August 24 was a breakout gap, and it was reasonable for bulls to buy the August 24 low and scale in lower. Those bulls will likely be happy to exit back at the August 24 low, which is a magnet for the bulls.
- The market may stall halfway up to the August 24 low around 4,050 area, as this might be the breakeven price for some of the bulls that bought the August 24 low and lower.
- If bulls are disappointed enough by the selloff down to the September 1 low, some bulls will use this rally to take profits. This increases the risk of today’s rally up to 4,050 – 4,080 area and selling off.
- Another target for the bulls is the August 26 close. Some bulls bought that close and scaled in low, so it will also be a magnet.
- The market will probably reach these targets over the next couple of weeks and begin to go sideways around the August 24 low.
- The bulls want today to be another strong bull bar closing on its high, increasing the odds that this is the start of trend resumption up to the August 16 high.
- The bears want the bulls to become disappointed soon. They want something wrong with today’s close on the daily chart.
- The bears are hopeful that today will lead to a Low 2 short with the September 2 low or that the rally over the past few days is part of a more complex pullback such as a wedge bear flag.
- Next, those bears want a successful breakout of the July 26 low and test of the July 14 low; however, this will probably not happen.
- Today is Friday, so weekly support and resistance are important. The bulls want the week to close on its high. However, the bulls will probably be disappointed with the close, and the weekly chart will likely have a tail on top. This makes me think that even in today’s rallies, traders should be open to a selloff going into the close, creating a tail on the weekly chart.
- The bulls want the opposite, and they do not care if today rallies, as long as the market closes around the high of the day, which would prevent a tail on the weekly chart.
Emini 5-minute chart and what to expect today
- Emini is 25 points in the overnight Globex session.
- The market is gapping up, and the bulls are trying to get a strong finish to the week. At this moment, this is good for the bulls. However, it will be difficult for the bulls to get a third consecutive strong bull close on the daily chart. This makes me think the market will do something disappointing today and close at least below the midpoint of the day’s range and possibly below the open of the day.
- Bulls want a trend from the open; however, the odds favor a trading range open.
- Traders should wait for 6-12 bars before placing a trade. This will help traders avoid getting trapped on the open.
- Traders can also wait for a credible stop entry, such as a double top/bottom, wedge top/bottom, or they can also wait for a credible breakout.
- Traders should also pay attention to the day’s open since they might close around the open.
- Lastly, today is Friday, so traders should be mindful that Fridays have the potential to have strong breakouts late in the day as traders fight over the weekly chart close. This means traders must be prepared for a surprise breakout late in the day and not be in denial if one 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 EURUSD is breaking out above the moving average for the first time in several days. This is good for the bulls, but they need a strong close here.
- The bears will sell above the moving average, betting on sellers above and sideways. They want to prevent the bulls from getting a strong close here.
- The market is also testing the midpoint of the July – August trading range so that some bulls will take profits here.
- The bulls need strong consecutive bull closes to convince traders of higher prices; without it, the market may continue sideways.
- Overall, the market will probably go sideways over the next couple of weeks, and the bulls will test the August highs soon.
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
- I will update at the end of the day.
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.
