Emini and Forex Trading Update:
Friday April 3, 2020
I will update again at the end of the day.
Pre-Open market analysis
Yesterday was a trading range day, but it closed on its high. I said early this week that the pullback would probably only last 2 – 3 days. The bulls want yesterday to be the start of a 2nd leg up on the daily chart.
When Tuesday went above last week’s high, it triggered a buy signal on the weekly chart. The bulls want the week to close above last week’s high. That would increase the chance of higher prices next week.
Everyone knew that the unemployment report would be bad. The lack of a reaction this morning means that the Emini had already fully priced it in.
Overnight Emini Globex trading
Today’s unemployment report was bad, as expected. Since it was expected, the market barely reacted. The Emini is down 6 points in the Globex session.
The bulls want the Emini to break strongly above 2500 and the EMA on the 60 minute chart. It got above both yesterday, but failed to accelerate up. That increases the chance of more sideways trading or even a reversal down today. The bulls need a strong break above that resistance if today will become a bull trend day.
Markets have inertia. After 2 sideways days, the odds favor another one today. Unless there is a strong move up or down, day traders will look for at least one leg up and one leg down today.
Traders are deciding whether the bear flag on the daily chart will lead to a higher low or a new low. After 2 sideways days, the answer is not yet clear.
The selloff might not be deep enough to attract buyers. Also, it was not climactic and therefore there has not been a V bottom this week.
This lack of clarity increases the chance of a 3rd sideways day today. If the day remains small, the Emini might get drawn to weekly targets at the end of the day. These include this week’s open, high and low, and last week’s close and high.
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 (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 daily chart of the EURUSD Forex market has been sideways for 8 months. There have been several big legs up and down over the past month.
The March rally had 4 huge bull bars. That makes a 2nd leg up likely. I have been saying that the bears might get 3 – 5 days down before the bulls buy again. Today is the 5th day down. If the bulls do not get a reversal up today or tomorrow, traders will expect a new low.
This selloff so far has 4 big bear bodies. But they followed 4 even bigger bull bodies. Markets like symmetry. That increases the chance of a reversal up today or Monday.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market sold off early in the European session, but it then entered a tight trading range. Day traders have been scalping for 10 pips for the past 5 hours. The daily chart is oversold and a 2nd leg up is likely on the daily chart. Consequently, there is an increased chance of a bull trend today. The bulls want today to close near its high. It would then be a credible buy signal bar for Monday.
The bears have already done all that they need to do. They currently have a 4 big bear day in their 5 day selloff. If they can keep the day near its low, that will increase the chance of lower prices next week. There is not much incentive for them to drive the market down from here today.
Therefore, there is probably not much left to the downside today. Traders will decide whether to maintain the trading range or reverse up.
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 (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
On the open, the Emini reversed down from above yesterday’s high, the 60 minute EMA, and the 2500 Big Round Number. It sold off in a bear channel for several hours. It was in a trading range for the 2nd half of the day.
This week’s candlestick is a bear bar on the weekly chart. It is a Low 1 sell signal bar for next week. But after the extreme sell climax on the daily chart, the bulls are looking for a higher low and a 2nd leg sideways to up.
When there are conflicting signals, the market usually goes sideways. Therefore, while the odds favor a move below this week’s low, the Emini will probably be sideways for at least another week.
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.
