Emini and Forex Trading Update:
Wednesday September 18, 2019
I will update again at the end of the day.
Pre-Open market analysis
Th Emini has mostly trading range trading for 2 weeks. At 11 am PST today, the Fed will make its September FOMC interest rate announcement. This will probably affect the market for the rest of the week.
The bulls want a breakout to a new all-time high. They will probably achieve their goal by the end of October, but not necessarily this week.
Traders must be ready for anything after a Fed announcement. For example, the top of the ledge on the daily and weekly charts is down around 2940. It is a strong magnet below and the Emini should pull back at least a little to below the top of that ledge top within the next month.
Which will come first, the new high or the test of the ledge top? We will find out over the next few days.
Overnight Emini Globex trading
Most of the price action over the past 3 weeks has been sideways. Day traders will continue to scalp and look for 1 – 2 small swing trades every day until this behavior changes.
Because there is typically a quick, big move up and down in the 1st few minutes after the FOMC announcement, day traders should exit their positions ahead of the interest rate report. It is usually best to wait for at least 2 consecutive trend bars up or down before resuming day trading. That means most traders should wait until at least 11:10 am PST before day trading again.
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 reversed up yesterday from a test of a double bottom. Yesterday is therefore a double bottom pullback buy signal. Today traded 1 pip above yesterday’s high and triggered the buy signal.
But, it immediately sold off. There were more sellers than buyers above the buy signal bar. The buyers might be waiting for today’s 11 am PST FOMC announcement.
Buy and sell signals in trading range
Just because there is a buy signal and it triggered does not mean that the odds greatly favor a rally. The chart has been sideways for 3 weeks. It is therefore in a trading range and in Breakout Mode. Consequently, the odds for a rally are about the same as for a selloff.
Traders should also see the 3 week trading range as a bear flag just below the EMA. Until there is a breakout, there is no breakout.
The chart has been in a bear channel for over a year. There is a gap below around 1.08 and 2 measured move targets there as well. Every strong reversal up over the past year lasted only a few weeks before the EURUSD turned down to a new low.
There is no sign that this pattern is about to end. While the odds currently might slightly favor a rally to the August high, traders should continue to expect lower highs and new lows until there is a rally far above a major lower high. The most recent major lower high is the June 25 high just above 1.14.
Overnight EURUSD Forex trading
After trading 1 pip above yesterday’s high overnight, the 5 minute EURUSD Forex chart sold off 35 pips. It has been in a 20 pip trading range for the past 4 hours.
Today’s 11 am PST FOMC interest rate announcement is potentially a major catalyst. Traders expect a big move up or down after the announcement. There is often a big move in both directions Most expect the trading range to continue until the announcement. They therefore will continue to scalp until then.
An FOMC announcement typically leads to a big move up or down. Furthermore, there is usually quick moves up and down in the 1st couple minutes after the report. Day traders should exit positions ahead of the report and wait at least 10 minutes after the report before resuming trading.
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 sold off to below yesterday’s low on the FOMC interest rate cut. But it reversed back up to above yesterday’s high, turning today into an outside up day.
While the odds continue to favor a new all-time high soon, most days over the past few weeks have not been strong bull trend days. There was mostly trading range price action on the 5 minute chart. There is no sign that this is about to end.
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 Intraday Market Update page.
