Emini and Forex Trading Update:
Friday November 22, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini sold off early yesterday and reversed up. It is a High 1 bull flag buy signal bar for today. But the past 2 days had bear bodies. This is a weak buy setup. Traders will expect sellers not far above yesterday’s high.
The dominant force today will be the magnetic pull of the open of the week. The bulls want a 7th consecutive bull bar on the weekly chart. They will therefore try to get today to close above the open of the week.
But 7 consecutive bull bars late in a bull trend is very unusual. Consequently, the bulls will probably fail. That means that today will have a hard time holding above the open of the week. Therefore today will probably not be a strong bull trend day.
Can it be a strong bear trend day? The daily chart is still in a Small Pullback Bull Trend. While Wednesday broke below the bull trend line, it was not a strong bear day. The bears will probably need a micro double top before they can begin a 50 – 100 point correction. That makes a big bear day unlikely as well.
Most likely, the bulls will try to get above the open of the week, but the week will close below the open. Today will probably be a 3rd consecutive sideways trading range day.
Overnight Emini Globex trading
The Emini is up 5 points in the Globex session. It is within 10 points of the open of the week. Today is Friday and that is the most important price on the weekly chart. The bulls want today to close above the open of the week. This week would then be the 7th consecutive bull bar on the weekly chart.
If there is a rally to above the 3116.00 open of the week today, traders should look for a late selloff to below that price. If the Emini is 5 points or so below the open of the week in the final hour, there might be a rally up to 3116.00. However, there will probably be more sellers than buyers there. Day traders should expect the week to close below its open.
The past 14 days have been mostly sideways and small. There has been at least one reversal every day. Since markets have inertia, day traders will assume that this price action will continue today unless they see a surprisingly strong breakout up or down with strong follow-through.
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 daily chart of the EURUSD Forex market has been in a trading range for 4 months and a bear channel for almost 2 years. Every trading range always has both reasonable buy and sell signals. But markets have inertia and resist change. Consequently, most signals within a trading range are minor. They lead to moves up and down that last 1 – 3 weeks and there is then an opposite signal.
The bears have a double top with the high of a bar from 2 weeks ago. Because the bear channel down to the November 14 low was tight, the EURUSD might have to test that low before the bulls can reach the October high and the 13 month bear trend line.
The October rally on the weekly chart (not shown) was the strongest rally in the entire 2 year bear trend. Traders therefore expect a 2nd leg up. It might have begun with the November 14 low.
More likely, the bulls want a 2nd reversal up from that level to confirm that the bulls are in control. Therefore, the EURUSD might have to test below 1.10 before the 2nd leg up to 1.12 begins.
The daily chart has been sideways in a tight range for 5 days. Day traders have been scalping for 10 – 20 pips while they wait for a breakout of the 5 day range.
On weekly chart, weak sell signal after week buy signal
Today is Friday and therefore the weekly chart is important. This week triggered a buy signal on the weekly chart.
However, the rally was small and now the EURUSD is back to the low and open of the week. This week will therefore probably close near the low of the week. It would then be a minor sell signal bar for next week.
The bears want as strong a sell signal bar as possible. They therefore will try to get the week to close far below the open. More likely, it will close around the open and become a weak sell signal bar for next week. There is no sign that a big move up or down is about to begin.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market has been in a 10 pip range for the past 5 hours. Day traders are scalping. But when the range is this small, it is difficult to make any money.
The EURUSD is back at the open of the week, which is a magnet, and it probably will stay within 20 pips of it all day. Consequently, day traders will continue to look for small scalps.
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 on the open but it reversed up from below the bottom of the 18 bar range and 3100. Furthermore, the bottom was a wedge bottom with good buy signal bar. If you look back to yesterday, the low was the 3rd leg down in an expanding triangle bottom.
Despite the rally, the Emini could not close above the open of the week. This week was therefore the 1st bear bar on the weekly chart in 7 weeks. That increases the chance of another week of sideways to down trading next 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.
