Emini and Forex Trading Update:
Tuesday April 13, 2021
Pre-Open market analysis of daily chart
- Yesterday was 12th consecutive bull day and the 12th day in a bull micro channel.
- The last time there were 12 or more consecutive bull days was in February 2011. That streak ended after 15 days. It was followed by a 9% correction that lasted 2 months. After a minor new high, there was a 24% correction into October.
- 3 legs up in tight bull channel over past 3 weeks, so parabolic wedge buy climax.
- Even though very strong bull trend, the buy climax is extreme. There is an increased chance of a reversal down coming at any time. Will it be as big as in 2011? There is a 50% chance of it being 10% and a 30% chance of it being 20%.
- Buy climaxes can last much longer than what might seem reasonable. While unlikely, this one could continue much higher.
- But it is already a once-a-decade type of buy climax. Therefore, even if it continues up, it will probably not go much higher before there is profit taking for at least a couple weeks.
- As I said over the weekend, the Emini might soon put in the high for the next many months and possibly for the year.
IMPORTANT: Reduced Emini and Forex reports
- Due to need to reduce workload, Al will only be writing the Emini and Forex daily reports on the days he is active in trading room. This will usually be 3 times a week: Monday, Wednesday, and Friday.
- The previous day’s Emini setups chart will be posted on those days with no report.
- See Trading Room calendar in right-hand-side sidebar for when reports are to be issued.
- Apologies for short notice.
Yesterday’s Emini setups
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. I talk about the detailed S&P Emini futures price action real-time throughout the day in the BrooksPriceAction.com trading room. We offer a 2 day free trial.
Charts use Pacific Time
When I mention time, it is USA Pacific Time (the Emini day session opens at 6:30 am PT, and closes at 1:15 pm PT). You can read background information on the intraday market reports on the Market Update page.
Although I just started two years ago and have a lot more to learn, I will fully support Al’s decision. I hope Al would continue giving us advices for many more years ahead.
Al, thank you so much for everything you do for so many people! I am so grateful. I sincerely hope you are able to spend extra time with your friends and family since life is getting somewhat back to normal these days. Your work has made such an impact on trader’s lives and P&L’s — not that money is everything. But, the freedom to work and earn a living by trading is such a great thing … and your thoughtful, insightful teaching methods are unequaled.
Al – you give so much. Thank you. We are all lucky to have any amount of time learning from you.
How would one mitigate the risk of a large market move after bull trends. Should the trader use tight stop or a wide one?
Kinds regard
Mahad
That question has a complicated answer. Here is an overview.
As long as the trader structures a trade that makes sense (a positive Trader’s Equation), he had lots of ways to trade profitably.
I assume you are taking about a trader and not an investor. Many investors never get out because they know that the market will eventually make a new high.
A trader who is willing to hold for several weeks will use a wider stop. One who is looking for a 1- or 2-day move will use a tight stop.
Some want high probability. They use wide stops and many scale in.
Some want low risk. They use tight stops.
We all support your decision. Please take good care of your health.
If reducing your workload means you’re sticking around to help us for many more years, I totally support your decision. Plus, you say several times a week in the trading room, “Your job has to make you money but it also has to be fun!” Good to see you take your own advice. None of us want to see you overdo it and have to stop!
Support Al’s decision too!