Emini and Forex Trading Update:
Friday November 8, 2019
I will update again at the end of the day.
Pre-Open market analysis
Yesterday was another bull day in a 6 bar tight trading range. The Emini is still going up and it might accelerate. Until midday yesterday, this week was likely to sell off to below the open of the week. That changed. Instead, the week will probably close near its high. Traders expect higher prices next week.
The top of the bull channel on the weekly chart is around 3120. Strong trends tend to overshoot before pulling back. Buy climaxes can go a long way before there is profit taking.
Overnight Emini Globex trading
The Emini is up 10 points in the Globex session. It will therefore probably gap up today. A big gap up has an increased chance of leading to a trend day. When the gap is up, if there is a trend, up is more likely.
However, when the Emini gaps far above the 5 minute EMA, many bulls are hesitant to buy far above that average price. This usually results in some trading range price action over the 1st hour or two. The bulls often wait for a double bottom or wedge bottom near the EMA before betting on a bull trend.
If there is an opening trading range, the bears will want to see either a double top or a wedge top. They will sell it and hope for a bear trend.
A trading range open is a sign of balance. If there then is a trend up or down, it usually is not as strong as a trend that begins from the 1st bar. There is always a 20% chance of either a bull or bear trend from the open on any day. When there is a big gap up, there is an increased chance that a trend will be strong.
Yesterday’s setups
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. I rarely also show limit order entries and entries on the close of bars. Buyers of the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day.
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 had a wedge bottom on October 1. That typically leads to a 2 legged rally. The start of the 2nd leg up is often the right shoulder of a head and shoulders bottom. That is a type of a higher low major trend reversal. Major reversal setups have a 40% chance of a trend up. The bulls are hoping that this will happen here.
More often, either the trading range continues or the bear trend resumes. However, the bulls bought every new low for 2 years. Therefore, even if the bears get their new low, it will probably reverse up and create another 1 – 2 month bear rally in the 2 year bear channel.
Overnight EURUSD Forex trading
Yesterday was a buy signal day for a higher low major trend reversal on the daily chart. Today broke above yesterday’s high and triggered the buy signal.
But instead of racing up and beginning a bull trend, the 5 minute chart so far only has had a 30 pip range overnight. This is because the 2 week bear channel has been tight. Many bulls are waiting to buy. They want to see either a micro double bottom over the next few days or a strong breakout above the 2 week bear channel.
However, there is plenty of time left in the day. The weak overnight rally could become strong if enough traders begin to think that a 2nd leg up is starting on the daily chart.
Can today be a bear trend day? Probably not. Today is reversing up from a 5 day micro wedge at support on the daily chart. Additionally, it is near the bottom of the 4 month trading range. Finally, yesterday was a bull trend reversal day. This combination makes a bear trend day unlikely today.
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. Buyers of the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day.
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
The Emini gapped up and rallied on the open. The rally stopped exactly at the top of the bull channel on the weekly chart.
After a wedge reversal, the Emini entered a trading range. The bull trend resumed into the close. Traders should expect at least a small break above the top of the bull channel before there is a 1 – 2 week pullback.
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 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 Market Update page.
