Emini bull channel but double top bear flag with March high
I will update again at the end of the day.
Pre-Open market analysis
The Emini could not sustain a weak bull reversal day yesterday. It was the 5th consecutive small trading range day. Traders want to know if there will be a breakout far above the March high or a reversal down. There is no sign of either yet. Day traders will continue to mostly scalp until there is a series of strong bull trend bars up or down on the 5 minute chart. However, a month-long swing up or down will probably begin within the next 2 weeks.
Overnight Emini Globex trading
The Emini is down 5 points in the Globex market. Today therefore might gap down. Traders are deciding if yesterday’s pullback will lead to one more leg up to the March high this week or continue down to the July 11 pullback low. Because the past 5 days have been mostly sideways on the 5 minute chart, that is likely again today. But, since the daily chart is at important resistance, a strong trend up or down can begin at any time.
Yesterday’s setups
Here are several reasonable stop entry setups from yesterday. I sometimes also show limit order entries and entries on the close of bars. 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 in a position at the moment, these entries would be logical times for him to enter.
EURUSD Forex market trading strategies
With the overnight reversal down, the trading range on the EURUSD daily Forex chart now has 5 legs. It is therefore a triangle. But, the parabolic wedge sell climaxes in May were extreme, as was the June 14 sell climax. Therefore, the chart is slightly more likely to test the June 14 high before breaking below the June 21 low.
The EURUSD daily Forex chart has been in a trading range for 2 months. It is therefore in Breakout Mode. Traders expect a 300 pip measured move up or down. But, the parabolic wedge sell climaxes in May were exceptionally strong. In addition, they stopped at support on the weekly chart. Finally, there was another extreme sell climax on June 14. These factors make a test of the June 14 high more likely than a breakout below the June 21 low.
However, even if the daily chart gets a 50% pullback to around 1.20, the bear trend is so strong that the rally will probably be a pullback in a bear trend and not a new bull trend. Consequently, the odds favor a break below the June 21 low after any rally over the next couple of months.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart rallied above yesterday’s high, but reversed back down. Since the 50 pip selloff is in a tight bear channel, the odds are against a strong rally today. Because the selloff is now back to the apex of the 2 month triangle, it will probably not continue much lower today. Therefore, today will probably begin to go sideways and day traders will scalp. The bottom of the range will likely be around where the market now is and yesterday’s low. That is about 25 pips lower.
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 sometimes also show limit order entries and entries on the close of bars. 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 in a position at the moment, these entries would be logical times for him to enter.
The Emini finally broke above the March major lower high. As strong as the rally was, it could not get far above that resistance. It closed only 1 tick above.
The bulls need follow-through buying over the next several days to convince traders that the breakout will be successful.
See the weekly update for a discussion of the price action on the weekly candlestick 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.
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.
