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Emini unlikely to have 4th consecutive bear day today

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Emini and Forex Trading Update:
Wednesday April 21, 2021

Pre-Open market analysis of daily chart

  • Yesterday was the 3rd consecutive bear day. The bear bodies are getting bigger so the momentum down is increasing.
  • These 3 bear days were caused by profit taking. Once there is profit taking in a buy climax, it usually has at least a couple legs down.
  • The 3-day selloff might be the start of the Emini trying to get neutral ahead of next week’s FOMC announcement.
  • The Emini has not had 4 consecutive bear days since October. That increases the chance that today will close above the open.
  • A streak of 13 consecutive bull days ended last week. That was the most extreme streak since 2011.
  • Streaks like that are a sign of a very overbought market. The market typically has a difficult time going much higher for several months.
  • With the Emini as overbought as it is, and at the end of the March/April seasonally bullish window, the bull trend is probably converting into a trading range for the next couple months. The bottom of the range should be about 10% or more down from the high.
  • Because the bull trend has been so strong, there might be one or two more brief new highs before there is a 10% pullback.
  • A tight bull channel usually does not become a bear trend, without first going sideways and forming a micro double top, or a double top. The bulls will buy the 1st selloff, even if it is 10%.
  • The Emini might have to go sideways for many days before it goes down.

Overnight Emini Globex trading on 5-minute chart

  • Down 3 points in the Globex market, but still in middle of yesterday’s trading range.
  • Bulls want measured move up from yesterday’s double bottom.
  • 60-minute EMA was support for the past month. It is now resistance unless the bulls can break 20 points above it.
  • Bears want breakout below yesterday’s low, and 20-point measured move down, based on the height of the trading range.
  • The bulls are concerned about 3 consecutive bear days, but know a 4th one is unlikely. They will buy selloffs, especially in the final hour.
  • The bears want a 4th consecutive bear day, which would increase the odds that a 10% correction is underway. They will sell rallies, especially in the final hour.
  • Bears need more than a 4th bear day to convince traders that the market is correcting. They need a big bear day closing near its low.
  • That is unlikely, given how strong the rally on the daily chart has been.
  • Traders expect confusion and a lot of trading rang trading today. There should be at least one swing up and one swing down.
  • If there is a series of strong trend bars in the 1st hour in either direction, traders will look for a trend day.

Yesterday’s Emini setups

Emini bear trend from the open and then trading range. 3rd consecutive bear day.

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.

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 parabolic wedge top in 9-month trading range
  • Reversing down from 3rd leg up in tight bull channel, so parabolic wedge rally.
  • At bottom of December/March trading range and 50% pullback.
  • Should soon get minor reversal down, for a couple weeks to around 50% pullback and April 8 low, which was the start of the wedge.
  • Bulls want Small Pullback Bull Trend to continue up to above January high.
  • Bears want resumption of 4-month bear trend.
  • 9-month trading range likely to continue for at least a couple more months.

Overnight EURUSD Forex trading on 5-minute chart

  • Sold off overnight in Trending Trading Range Day, which is a weak bear trend.
  • Trading range for 5 hours, so day traders are buying reversals up, and selling reversals down for scalp.
  • Bulls hope for higher low major trend reversal back to open of day, so that today will be High 1 buy signal bar on daily chart.
  • Bears want breakout below 5-hour trading range, and for today to close near its low.
  • Most likely will not be strong bull or bear trend today. Day traders will probably scalp all day.
  • If today closes near its low, then increased chance of lower prices for a couple weeks.
  • If today reverses up and closes near its high, bulls will expect higher prices tomorrow.
  • However, probably limited upside over next week, since 2-week pullback likely soon.

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

Emini bull trend from open became small pullback bull trend

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

  • Bull Trend From The Open, became Small Pullback Bull Trend.
  • Broke back above 60-minute EMA.
  • Evolved into trading range midday, as often happens.
  • Trend resumption up in final hour resulted in test of open of week. Bulls want 5th consecutive bull bar on weekly chart, which would be unusual.
  • On daily chart, big bull bar. But, after 3 consecutive bear days and 13-day streak of bull days, trading range likely soon.
  • Might get one or two brief new highs before 5 – 10% pullback.
  • Day after buy climax has 75% chance of at least a couple hours of sideways to down trading starting by end of 2nd hour.

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.

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