Emini and Forex Trading Update:
Friday November 1, 2019
I will update again at the end of the day.
Pre-Open market analysis
October ended yesterday. It was an outside up month on the monthly chart. Traders see it as a buy signal bar for November. By closing above both the September and July highs, the Emini has a better chance of higher prices in November.
But if the bears can prevent November from breaking above the October high, November might become a sell signal bar for December. The momentum up on the daily, and weekly charts favor at least slightly higher prices in November.
Yesterday sold off on the open after Wednesday’s FOMC rally. It then entered a trading range around the open of the week. That could be a magnet all day, especially in the final hour. If the week closes below the open, this week will be a bear bar on the weekly chart. Traders would see it as a sell signal bar for a failed breakout above the July all-time high.
After 3 consecutive bull bars on the weekly chart, there is a 50% chance that this week will have a bear body. If the bears can get the week to close on its low, it would be a stronger sell signal bar. However, after 3 bull weeks, there probably will be buyers not too far below.
There are many magnets around the open of the week. This include the September and July highs and the 60 minute EMA. With 4 sideways days this week, there is an increased chance that today will be mostly sideways and stay around these magnets. However, the bulls will try to break above the November high to trigger a monthly buy signal.
Overnight Emini Globex trading
The Emini is up 12 points in the Globex session. The bulls want a break above Wednesday’s high, which is the October high. That high is only a point or so above the current Globex price. The momentum up is strong on all time frames and the bulls will probably achieve their goal today or next week. Today might even gap above the October high.
The bears want the week to close below Monday’s open. That is about 17 points below the October high. If the Emini day session opens where it is trading in the Globex session, it will be below the October high. The bears will try to prevent the Emini from triggering the monthly buy signal. They will try to create an early reversal down.
If the bulls break above the October high and trigger the buy signal, the bears will try to make it fail. They would again try for an early reversal down.
Whether or not the bulls trigger the monthly buy signal, the open of the week could be a magnet at the end of the day. Unless the Emini is 10 or more points above the 3033.25 open of the week in the final hour, day traders should be ready for an attempt by the bears to create a late selloff to below the open of the week.
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 has a double top with the October 21 high. The bears want a break below the October 25 neck line and then a measured move down to the October 15 buy climax low.
However, there have been 4 bull bars this week and the 13 month bear trend line is a magnet above. In addition, yesterday was a bull doji bar and that is a weak sell signal bar. Therefore, the chart is not clearly bullish or bearish.
That increases the chance of more sideways trading as traders wait for clarity. Will the EURUSD test the bear trend line? It probably will at some point in November. Will it fall below the October 25 neck line? It will probably do that as well. Traders are now deciding which it will do first. It might have to go sideways for another day or two before they form an opinion.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart sold off from yesterday’s close on today’s open. Twenty minutes ago, it broke below yesterday’s low, but the breakout was only 3 pips. That triggered the sell signal on the daily chart. But the context and sell signal bar are weak. Also, a 3 pip breakout is weak as well. There is a lack of conviction so far today.
The bears want today to close below yesterday’s low. That would create a strong bear bar on the daily chart and increase the chance of lower prices next week.
They need follow-through selling after the small selloff from 20 minutes ago. If they get more selling over the next hour, today could become a bear trend day. But the hesitation over the past 20 minutes reduces their chances.
The bulls instead want a reversal up from below yesterday’s low. But the lack of buying in the overnight session make a strong rally unlikely. This is especially true after yesterday formed a doji bar on the daily chart. The odds are against a strong rally today.
Today is Friday. This week is a bull inside bar on the weekly chart. It is a buy signal bar for next week. It would be a stronger buy signal bar if the week closed near the high of the week. That is unlikely. Instead, today will either continue down at least a little more or be another trading range day.
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 gapped above the October high, which triggered a monthly buy signal. Gaps on the monthly chart are rare. This one will probably close before the end of the month. Less likely, it might take 5 – 10 months to close. Today was a good day for the bulls. The Emini will probably trade higher next week and for at least a month or two.
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.
