Trading Update: Monday September 13, 2021
Emini pre-open market analysis
Emini daily chart
- Emini bears sold off for 5 days, which is relatively a lot compared to other pullbacks since the pandemic low.
- Next week’s FOMC announcement will be important. That increases the chance of the Emini starting to go sideways.
- Next magnet below is the bottom of the bull channel, which is just a few points below Friday’s low.
- September or October should be high of year and start of 15 to 20% correction. There is a 40% chance it has already begun.
- There have been many selloffs comparable to this one since the pandemic low. The bulls bought each one, and they will probably buy this one as well.
- It has been strong enough so that the bulls will probably need a micro double bottom this week before they can get back to a new high.
- Might get sharp acceleration up to above 4600 before correction begins, possible after the September 22 FOMC meeting. If so, that would probably be a blow-off top.
- Next 15% move should be down instead of up.
Emini 5-minute chart and what to expect today
- Emini is up 30 points in the overnight Globex session.
- Friday was a sell climax day. About 50% of the selling was likely caused by the gamma effect and option selling firms, and only 50% is from institutions selling stock.
- The day after a sell climax day has only a 25% chance of being another big bear day.
- There is a 75% chance of at least a couple hours of sideways to up trading that begins by the end of the 2nd hour.
- Magnets above are the 10:15 pm PT lower high (which was the start of the late sell climax), and the 60-minute EMA, the 20-day EMA. They are all between 4470 and 4490, which is where the Emini will likely open today.
- With Friday being a very big day and today opening in the middle of Friday’s range, there is an increased chance of today being an inside day. It will probably mostly overlap Friday’s range, which means it should have a difficult time getting much above Friday’s high or below Friday’s low.
Friday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- As expected, there were sellers above Thursday’s high, after 3 bear days.
- The bears hope that the reversal down from a double top with the July 30 high will lead to a resumption of the bear trend.
- Getting 2nd leg down for several days from September 3 parabolic wedge top.
- There is almost a 60% chance that this 7-day reversal down is minor, but it might reach the August 27 buy climax low before the bulls return.
- Bulls want a higher low major trend reversal to form over the next couple weeks. That would also be the right shoulder in a head and shoulders bottom.
- They then want a breakout above the July 30/September 3 double top and a measured move up.
- The bears want the July 30/September 3 double top to lead to a break below the August 20 neckline, and then below the November 4, 2020 bottom of the yearlong range.
- Since the bull channel to the September 3 high was tight, the bears will need a couple consecutive bear days to convince traders that the bear trend is resuming.
- Sideways for 3 months with no evidence that this is about to change. Reversals every week or two.
- Only 40% chance of either strong breakout above September 3 high or below August 20 low within the next several weeks.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Bear Trend From The Open. Only 1 bull bar in first 11 bars so aggressive bears.
- Evolved into trading range.
- Late reversal up from failed breakout below triangle. The low was just below the bull trend line on the daily chart.
- Oversold on daily chart and at bottom of bull channel so should bounce for at least a couple days.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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 Time
When I mention time, it is USA Pacific Time. The Emini day session charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.
In a bull trend after taking entry if the bars moves in favour of us and there are no large counter trend moves it gives us some happiness and enthusiasm. I cannot think of anything until the trade is over.
In the same way when the counter trend moves are large but minor or range move that is in sideways for a longtime it tests our calmness.
How to maintain a stable or neutral mindset while trading?
Where can I find information regarding the following statement?
“Friday was a sell climax day. About 50% of the selling was likely caused by the gamma effect and option selling firms, and only 50% is from institutions selling stock.”
I have written about it occasionally, and you rarely will hear about it on the business news. There is a lot of information if you search for something like “gamma effect of options during a selloff.”
About the daily setups. I understand where to put the stop, that is clear. I understand I have to exit if there is an opposing signal. That is also more or less clear. What I have big trouble with is where to take the profit. Should I take 2 points, should I take 4 points or even 8? The days are so different, one is a small trading range, one is a big bear trend day, they have different size bars, I don’t know what to do, so most of the time I just take 1 or 2 points. Please consider adding not here, but at the BTC Daily setups a row at the top of the page with something like: “Recommended default target until 8:30 bears 4 points, bulls 2 points. From 8:30 bears 2 points, bulls 1 points”. This would be amazing in the long run because we would have a database of what you consider good targets depending on the day. Thank you.
I have thought about that occasionally, but I cannot add to what I am currently doing. I have other projects that I am working on, and having fun is important. Trying to do too much is not good.
Most traders will make more money if they go for swing trades or big scalps. If the bars are about 4 points tall, the minimum scalp is 2 points, but they will have a better chance of making money if they go for at least 4 points.
If the bars are bigger than 6 or 8 points, they should try to go for 10 or more points. In all cases, they should look for an exit if their premise is no longer valid.
If they are trading in a trading range, they should always be exiting on strength, especially near the top or bottom, and not be hoping for a trend.
Thank you Al, this is very helpful. I’ll try to apply these guidelines myself. Looking forward to your next projects!
I noticed you stopped updating your scenario for the bond market and I miss your updates a lot. Would you be so kind to bring it back it if it’s not too much to ask? I wonder if you could update it once a month or every once in a while since it’s one of the most important markets for the whole economy.
Al dropped the weekend bond updates due to low interest in the 2021 Bond futures report video. Very low viewer numbers on website and YouTube videos.
Also, Al is looking to save work too as these reports are very time consuming. We are still looking for traders to help write the daily reports. : )