Emini and Forex Trading Update:
Monday November 30, 2020
I will update again at the end of the day.
Pre-Open market analysis
Friday was a bear doji bar on the daily chart, but the momentum up 3 weeks ago was strong. Traders expect a new all-time high this week. In fact, today might even gap to a new all-time high. Since today is Monday, there would also be a gap on the weekly chart.
Can today reverse down from a double top with the November 9 high? It is more likely that the Emini will go up at least a little above that high. But if today is a big bear day, the double top will become more credible.
Today is the final day of the month. November is a big bull bar on the monthly chart. That increases the chance of at least slightly higher prices in December. Today might even close at a new all-time high. If it does, tomorrow could gap up, which would create a rare gap on the monthly chart.
But because September and October were bear bars on the monthly chart, the rally will probably end some time in December. Traders should expect the Emini to be sideways to down for the first half of 2021, as I discussed over the weekend.
Overnight Emini Globex trading
The Emini is down 6 points in the Globex session. It will therefore probably open within Friday’s range. With the past 2 days being sideways and with the Emini in a trading range for 3 weeks, there is an increased chance of another trading range day today.
Today is the final day of the month, but the bulls do not need a big bull day today. November is going to be a big bull bar on the monthly chart no matter what happens today. There is therefore less incentive for a big bull trend day.
But with November being a big bull bar, traders expect at least slightly higher prices in December. That reduces the incentive for the bears to create a strong bear day.
Most likely, today will have a lot of trading range trading again today, like most days in November. Remember, most closed either around the open or middle of the day’s range. That is therefore what is most likely again today. But if there is a series of strong bars in either direction, traders will conclude that the day is probably becoming a trend day.
Friday’s setups – Early close
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
The EURUSD Forex market on the daily chart is testing the September 1 high at the top of a 4-month trading range. If the bulls get consecutive closes above that high, traders will look for the rally to test the next resistance, which is the February 2018 high above 1.25.
It is important to remember that most breakout attempts fail. The rally from the November 4 low has the best chance since August.
Even though the summer rally is resuming, traders should expect a disappointment. Yes, it probably will break above the September high, but will it continue up to the 2018 high? If it does, it will probably not do it in a straight line. It might test the November 11 low first.
If the rally from the November 11 low contained many big bull bars closing on their highs, traders would expect a quick move up to 1.25. But that is not the rally that we have at the moment. It is more likely that there will be a 2 to 3-week swing down from around the September high.
The rally from the November low is in a wedge bull channel. The 1st leg up in the channel began before the final low in the selloff from the September high to the November low. Also, the shape is not good. It will therefore not attract a lot of aggressive sellers. But if there is another pullback or two in December, the wedge could have a better shape. That couple lead to a pullback to the November 11 low.
One final point. There is a tendency for currencies to either breakout or reverse around the 1st of the year. Therefore, the EURUSD might wait until then before making its next big move up or down.
Overnight EURUSD Forex trading
The 5-minute chart of the EURUSD Forex market opened 1 pip below Friday’s high and rallied. But the rally has only been 30 pips. Most of the session has been within trading ranges.
The bulls would like the rally to continue up to the September 1 high, which is only 19 pips above the current session high. But the day’s small range is a sign of a lack of energy. Therefore today will probably not break strongly above that resistance.
At a minimum, the bulls want today to close above the open. There would then be consecutive bull bars on the daily chart closing above the top of the 3-month trading range that began with the September 9 high. Traders would then expect at least a small break above the September 1 high this week, which is a 2-year high.
The bears want the opposite. They want today to be a reversal day and close on its low. Today would then be a sell signal bar on the daily chart for a failed breakout above the September 10 high.
At the moment, day traders have only been buying. But they have not been buying aggressively. If the EURUSD continues to go sideways, day traders will begin to look to short as well, looking for a possible reversal day.
Since the EURUSD is just below major resistance, there is an increased chance of a big move up or down before the end of the session. If there is a big move, up is more likely.
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. 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
The Emini sold off on the open in a sell climax. It then reversed up in a bull channel. While it spent the middle of the day going sideways, the bulls got trend resumption up to a new high by the end of the day.
The day closed just above the open. This is the 3rd consecutive bull reversal in 3 days. That increases the chance of at least slightly higher prices tomorrow.
Today was the final day in November. The bar on the monthly chart was a big bull bar and it closed near its high. That makes at least slightly higher prices likely in December.
The all-time high is only 17 points above today’s close. There is a small chance that tomorrow would gap up to a new all-time high. There would then be a gap up to a new all-time high on the monthly chart. I suspect that has never happened in the history of the stock market.
Because tomorrow is the 1st day of the final month of the year and the bulls have been strong in November and since March, there is an increased chance that the bulls will try to continue the rally through year-end. That increases the chance of a bull trend day tomorrow. Furthermore, it increases the chance of a break to a new high this week and follow-through buying for the 1st half of the month.
Whenever something is more likely, the opposite is also more likely. That means traders should not be surprised if tomorrow is a bear trend day. With all of the reversals over the past month, traders will be open to anything. But there is an increased chance of a bullish bias for at least the 1st half of December.
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.
