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Emini now has 11 consecutive bull bars and 11-bar bull micro channel

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Emini and Forex Trading Update:
Monday April 12, 2021

Pre-Open market analysis of daily chart

  • Strong bull trend, but getting too strong.
  • Last week closed on its high so might gap up this week (today).
  • 11 consecutive bull bars is rare and therefore climactic.
  • 11-bar bull micro channel is rare and therefore climactic.
  • 3-week parabolic wedge so buy climax.
  • Extreme buy climaxes can last a long time, but usually soon attract profit takers. Once profit taking begins, it is sometimes big and fast, like September 3, 2020.
  • Probably profit taking soon, and increased risk of big bear day this week.
  • 11 consecutive bull bars and bull micro channel mean strong bulls. Bulls normally buy 1st 1- to 3-day pullback. But this buy climax is so extreme, that there is an increased risk of a 2-week selloff coming at any time.
  • April might be putting in the high for the next several months, and possibly for the year.
  • No top yet so traders keep buying, but they know a sharp reversal can come at any time.

Overnight Emini Globex trading on 5-minute chart

  • Up 2 points in Globex session.
  • Friday ended with brief, sharp selloff after extreme rally. Big Up, Big Down creates Big Confusion. Confusion is a hallmark of a trading range, so increased chance of trading range open.
  • After extreme buy climax on daily chart, and at end of day on 5-minute chart on Friday, reduced chance of big bull day.
  • Also, increased chance of big bear day at some point this week. If today is going to be bear day, probably will need to have 1- to 2-hour trading range first, so that bears could create major trend reversal.
  • If series of strong trend bars up or down in 1st hour, then increased chance of trend day. Early trading range likely, and big bull day unlikely.
  • Day after extreme buy climax day has 75% chance of at least a couple hours of sideways to down trading that starts by end of 2nd hour.

Friday’s Emini setups

Emini double bottom then small pullback bull trend. 11 consecutive bulls bars on daily chart.

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. 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.

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

EURUSD Forex bull leg in trading range after wedge bottom
  • 4-day tight trading range in 3-week rally from wedge bottom. Tight trading range late in rally often is Final Bull Flag, so increased risk or reversal down within a few days of breaking above bull flag.
  • March 18 high was start of final leg down in 2-month wedge bottom, and it is a magnet above.
  • Since rally has 3 legs up in a tight bull channel, it is a parabolic wedge buy climax. That usually will soon attract profit takers, but might reach March 18 high first.
  • Bears want reversal down from double top with March 18 high, and then resumption of 4-month bear trend.
  • Rally is reversal up from 2-month wedge bottom. Usually will get higher low and 2nd leg up. Bulls should buy 1- to 2- week pullback for 2nd leg up.
  • Trading range likely for at least another month.

Overnight EURUSD Forex trading on 5-minute chart

  • Sold off early in overnight session, but reversed up from above Friday’s low. Now testing Friday’s high.
  • 4 sideways days in tight trading range. So far, today is 2nd consecutive inside day.
  • After strong overnight reversal up in 3-week bull trend, bear trend is unlikely today. Bulls should buy pullbacks.
  • Near top of 4-day tight trading range, and today’s range is already an average size. Reduced chance of strong continuation of overnight rally. Bulls have been buying at the market, and swing trading, but will probably soon switch to buying pullbacks and scalping.
  • Sideways for 3 hours but biggest pullback has been less than 20 pips. Day traders are still more interested in buying, but since in trading range, some will begin to look to sell reversals down for scalps.

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

Emini wedge bull flag and 2nd leg bull trap

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. 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.

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.

End of day summary

  • Early bear channel reversed up from wedge bottom at around a 50% pullback from Friday’s rally.
  • 2nd Leg Bull Trap and failed breakout to new all-time high. Midday reversal with Micro double top and higher high major trend reversal led to selloff down to open of day.
  • Reversed back up to a new high, and today was another trading range day that closed near its high.
  • This is now a streak of 12-day bull bars on the daily chart. It is the longest streak since the 15-day streak that ended in February 2011. That led to a 24% correction 8 months later.

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.

  • Hi Al,

    Would like to ask why you would consider today as a bear day? Its close is above the open.

    • I started writing about an hour before the close, and after the close, I did not realize that I had not removed that line. I just fixed it.

      Thanks,
      Al

  • Dear AL,
    2nd bar is an OU, third bar is a big bull bar closing at high, a break out bar and follow through bar.

    If I was actually trading at the open, I would had enter on the fourth bar at the high of the third bar before the bar closed, and being trapped. Also, since the third bar is big, will not wait for a third consecutive bar to confirm.

    What make you not entering long on the fourth bar, any other specific concerns, so I can be alert on the same situation in the future? Thanks.

    • The second bar you are referring to (and the first 7 bars on the chart) are from the last day session, which was this past Friday, 4/9 (see gray hash marks above “4/12” which separate the day sessions). Cross reference two charts above in today’s summary titled “Friday’s Emini Setups,” that should bring things together / help with context to explain your questions (these are the previous session bars, not part of today’s open).

      Al will sometimes use the previous day session in chart analysis to illustrate what the computers are seeing. On the last bar of the 4/9 day session, bulls used last Friday’s closing bar (50% pull back from Friday’s buy the close rally) to buy above it at the open of today’s session (see Al’s first bullet for today’s Emini End of Day Summary). Al also illustrates the computers saw the first leg down of the first wedge bottom in today’s session started at the close of last Friday’s session.

      Last, Al does not typically provide bar-by-bar requests for analysis in the daily summary comments section (here). Kindly refer to Al’s: Brooks Price Action website, https://www.brookspriceaction.com, (register if needed) » Forums » Trading Updates from Al Brooks » (and find the trading session day to review bar analysis).

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