Bull surprise bar on Emini weekly chart

Emini and Forex Trading Update:
Monday April 8, 2019

I will update again at the end of the day.

Pre-Open market analysis

The Emini formed a bull trend bar on the weekly chart and it closed near its high. This was after 2 weekly sell signals over the prior 5 weeks. The bears might be giving up. The bar was strong enough to qualify as a bull Surprise Bar. Surprise Bars typically have at least a small 2nd leg up. Consequently, the Emini will probably be sideways to up over the next.

If the bears can create a big bear trend bar that closes near its low this week, they will erase last week’s bullishness. If they succeed, the odds would again shift back in favor of a 1 – 2 month pullback. After last week’s rally, the Emini will probably test the all-time high before the end of May.

Overnight Emini Globex trading

The Emini is down 3 points in the Globex session after coming within 2 ticks of 2900. That Big Round Number is resistance.

There is also a nested wedge on the daily chart. This increases the chance of profit-taking at some point this week. That means one or more strong bear trend days. Consequently, day traders will watch for topping patterns on the 5 minute chart.

While the bulls want a strong break above 2900 today, the rally on all time frames is extreme. In addition, the momentum up is dissipating on the 60 minute chart over the past 2 weeks. Most days have been predominantly sideways. This reduces the chance of a big rally above 2900 today. Even if the bulls got that rally, it would probably be an exhaustive move leading to 1 – 2 weeks of profit taking.

Friday’s setups

Here are several reasonable stop entry setups from Friday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. 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.

EURUSD Forex market trading strategies

The EURUSD daily Forex chart broke above last week’s ii (consecutive inside bars) buy setup last overnight. The bulls have a double bottom with the March low. At a minimum, they want a rally back above the March 26 sell climax (final bear leg) and a 50% retracement. Because the chart has been in a trading range for 5 months, they will probably achieve that objective over the next 10 days.

Since the 3 week selloff has been strong, the bears hope that today forms a micro double top with Wednesday’s high at the EMA. They want the breakout above the ii to fail and for the daily chart to reverse strongly below the March low.

Traders want to see consecutive closes beyond the trading range before believing that a breakout up or down will succeed. Everyone is waiting for news from Brexit, which will probably come soon. It will likely be a catalyst for a 300 pip measured move above or below the 5 month trading range.

Overnight EURUSD Forex trading

The EURUSD 5 minute Forex chart rallied 40 pips overnight. By breaking above Friday’s high, the rally triggered an ii buy signal on the daily chart.

But, the consecutive bear bars on the daily chart and the strong 10 day selloff reduce the chance of a strong rally to the March high. In addition, the uncertainty of Brexit is a problem as well. Finally, the daily chart has been in a tight range for 7 days and most breakout attempts fail.

240 minute chart has head and shoulders bottom

The 240 minute chart has a higher low major trend reversal. In addition, the March 26 high is the top of a bear channel. It is therefore a magnet, especially since it is also in the middle of the 5 month range.

Because the overnight rally has been in a tight bull channel on the 5 minute chart, it is strong. Therefore, the best the bears will probably get today is a 20 – 30 pip pullback.

While there is a chance of a strong rally from here today, the daily chart is in a 7 day tight trading range just below the daily EMA. These 2 factors will probably limit the upside. Since the context and buy setup are good for the bulls, this is probably the start of a rally up to around 1.1330.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

Here are several reasonable stop entry setups for today. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. 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.

End of day summary

Today was the 1st pullback on the daily chart in 9 days. The bulls bought below Friday’s low.

The Emini reversed up from below Friday’s low and from the 60 minute EMA on the open. It rallied for the rest of the day. Since it traded above Friday’s high, it became an outside up day.

Today was a pullback in a 9 day bull trend. Even though it was an outside up day, it is a High 1 bull flag and a buy signal bar for tomorrow. The bulls are trying to break strongly above 2,900 and then the September all-time high.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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Trading Room

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Charts use Pacific Standard Time

When I mention time, it is USA Pacific Standard Time (the Emini day session opens at 6:30 am PST, and closes at 1:15 pm PST). You can read background information on the intraday market reports on the Intraday Market Update page.

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