Trading Update: Wednesday September 8, 2021
Emini pre-open market analysis
Emini daily chart
- Yesterday dipped below the bottom of the 6-day tight trading range, but then closed back in the range.
- Every day in September has traded through the open of the month, which tells traders that it is an important price.
- September is currently the 8th consecutive bull bar on the monthly chart. That has never happened in the Emini. If the month closes below the open, then the streak will be over.
- September should become the high for the remainder of the year. If not September, then probably October.
- The weekly Small Pullback Bull Trend has lasted an unusually long time and it therefore should end soon. The biggest pullback was 10% and it happened a year ago.
- When a Small Pullback Bear Trend ends, it does so with a pullback that is at least 50% bigger. Therefore, traders should expect a 15 to 20% pullback to start within a month or so.
- The FOMC meeting on September 22 is especially important because the Fed might start to change its language after a couple years of saying the same thing. That meeting is therefore a potential catalyst for a big move up or down.
- A big move up will probably be a blow-off top.
- A big move down could be the start of the 15% correction. That correction can begin at any time, including a few weeks after the FOMC announcement. It might have already begun.
- After 6 days in a tight trading range, traders expect another sideways day. Since this is a Breakout Mode pattern, there can be a big trend day up or down at any time. It will probably begin with a series of strong trend bars in the 1st hour. Without that, traders will expect a continuation of the 6-day range.
Emini 5-minute chart and what to expect today
- Emini is down 6 points in the overnight Globex session.
- This is now the 3rd day down from the all-time high.
- With most days for 2 weeks spending a lot of time sideways, traders will expect that again today. The small days might continue up to the September 22 FOMC announcement.
- However, with September likely to be the high for the remainder of the year, there could be an acceleration down or a blow-off top. That means a big trend in either direction can happen at any time.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Today so far is the 3rd consecutive bear day after Friday reversed down from a parabolic wedge rally and a double top (with the July 30 high).
- Today’s low is testing the August 13 high breakout point.
- After a parabolic wedge, traders should expect a couple small legs sideways to down for a week or two.
- Targets below are the 50% pullback, the August 27 low, and the July 21 higher low.
- After 4 days down, the EURUSD should start to go sideways today or tomorrow for at least a couple days before there is a 2nd leg sideways to down.
- The bulls want the reversal to only be sideways for a few days. They then want the bull trend to resume.
- The bears are hoping that this reversal will fall below the August 20 low, which is the neckline of the July 30/ September 3 double top. They then want the selloff to continue down for a 600-point measured move.
- The bears only have 30% chance of achieving those goals. There should be buyers between 1.17 and 1.18, and there probably are buyers below the March 2000 low at 1.16.
- Most likely, the selloff will form a higher low and lead to a 2nd leg sideways to up. However, the EURUSD has been in a tight range for 4 months, and that range is within a yearlong range. There is no evidence that this is about to change. There should be sellers above, around the June 25 high and 1.20.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- After a wedge rally to the EMA, the Emini sold off for a measured move down and a test of the 4,500 Big Round Number and the August 25 high Breakout Point.
- The first reversal up from the micro double bottom was minor.
- The second reversal up was a higher low major trend reversal.
- There was a Spike and Channel bull trend that tested the open of the day.
- Today closed just below the open.
- Today is a High 1 buy signal bar on the daily chart.
- However, the setup is weak since today is a doji bar and the daily chart is in a tight trading range.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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 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.
Can you please tell me why selling yesterday 7 september bellow bar 1 was a good trade and today 8 september was not? Is it because yesterday the bar was in the middle of the previous day range and today was breaking bellow the low of previous day? Maybe I should have waited for the second bear bar? I took the loss above bull bar 2. Fortunately I trade only 1 micro contract. Thank you for answers.
Yesterday had 2 sell climaxes and was likely to have a 3rd for a possible parabolic wedge. Also, there were magnets below.
Today was a crash on the open. There is usually a 1- to 2-bar final leg down before a reversal up. With the bull bar closing on its high, the odds were that the 2nd leg would be small and that the bulls might buy the low of that bar. Also, it was at support.
I talked and wrote more about both in more detail in the chat room.