Emini and Forex Trading Update:
Thursday May 30, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini gapped down and sold off yesterday, but reversed up midday from the 200 day MA. The bulls hope that the break below 2800 and the bottom of the 3 month trading range will fail. But, yesterday was not a big bull bar closing on its high. It is not a strong bull signal bar for today.
Last weekend, I said that the weekly chart had a bear doji bar last week. I mentioned that it was a weak sell setup. I said that there might be more buyers than sellers below its low.
This week is the entry bar for that short. There are 2 days left to the week. The bears want this week to close on its low. However, given that last week is a weak sell setup, the bulls will try to get this week to close above last week’s low. Therefore, there is an increased chance of a rally into the end of the week.
What is most likely? Confusion. The Emini has been sideways for 3 months. When that is the case, there is a lack of conviction. Every move tends to reverse after a few days. Consequently, this week will probably disappoint both the bulls and bears. It can do that by going mostly sideways today and tomorrow.
Overnight Emini Globex trading
The Emini is up 10 points in the Globex session. After yesterday’s 2 reversals up from the 200 day MA, there might be follow-through buying today.
However, yesterday was a bear day on the daily chart. It is therefore a weak buy signal bar for today. As a result, traders expect that there will be sellers above yesterday’s high.
Even though the daily chart fell below 2800 and the 3 month trading range, it could still be testing this support. It is not yet clear that the breakout will succeed.
Confusion is a hallmark of a trading range. That makes sideways likely for a few days. Also, most days over the past month have had swings up and down. Therefore, today will probably again be a mostly trading range day. The bears might need more than one day to recover from Tuesdays’s exhaustive sell climax.
EURUSD Forex market trading strategies
The EURUSD daily Forex chart has been sideways for a month. This is a Breakout Mode pattern.
Since the chart has been in a bear channel for a year, the odds continue to favor lower highs and lows. However, the May rally was smaller than most prior rallies. Furthermore, the 4 day selloff is holding above the double bottom. Consequently, there is still a 50% chance that the bottom will hold and the bulls will get a test of the May double top.
In addition, even if the bears get their breakout, every prior bear breakout over the past year reversed back up within several days. As a result, the bulls will look to buy a reversal up from around the May low.
There is no reversal yet. Also, there is no bear breakout. The daily ranges have been small and most days have been mostly sideways on the 5 minute chart.
Weekly chart might form outside down bar this week
The week traded above last week’s high. It is now almost down to last week’s low. There is an increased chance of an outside down week on the weekly chart. This week would then be a sell signal bar on the weekly chart for next week.
However, the weekly chart has been in a tight range for 5 weeks. A breakout up or down will probably not go far before reversing back into the tight trading range. Until there is a strong breakout up or down on the daily and weekly charts, day traders are mostly scalping, looking for reversals.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has been in a 20 pips range overnight. Day traders are looking for scalps. But when the range is that tight, it is difficult to make even a minimum scalp.
Because the daily chart is near the bottom of a month-long trading range, day traders expect a reversal up within the next few days. This is true even if there is a break below the May low 1st.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
The Emini tested above yesterday’s high and below last week’s low in the 1st hour. It then reversed down for 4 hours. Next, it reversed up from a big wedge and closed in the middle of the day’s range. The daily chart is still in its breakout below the 3 month head and shoulders top. However, the wedge bull flag increases the chance of at least slightly higher prices tomorrow.
Tomorrow is Friday and weekly support and resistance are important, especially in the final hour. Last week was a sell signal bar on the weekly chart. Its low is therefore a magnet above. The bears want the week to close on its low.
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 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.
I just wonder if you took that BO trade at bar 65 or 66. Stop below bar 63 and expect a MM to 2789. You mentioned many times that this is your favourite trade. However that PB would have scared the hell out of me. Even if I had bought a 50 % PB at 2781.
Can any fellow student help me out here; why is the stop for bar 14 short = high of bar 12?
Is it because bar 14 is too tall => high risk and using high of bar 12 reduces the risk?
I think the stop for bar 14 short is the high of bar 14. Not sure what makes you think it is bar 12 high…
” 14 HH DT, F BO HOY 2es, OD, COL, PH, stop above 12 for swing down to new LOD ”
That was a typo and it was my fault. Sorry about that. I just changed it to 14, the sell signal bar.