Emini and Forex Trading Update:
Wednesday July 10, 2019
I will update again at the end of the day.
Pre-Open market analysis
On the daily chart, the bears have a parabolic wedge top at the 3,000 Big Round Number. However, they do not have a good sell signal bar or a micro double top. The 3 day selloff therefore is more likely a bull flag than the start of a bear trend.
Yesterday was a bull outside up day. It is therefore a buy signal bar for today. But the daily chart has been sideways for 5 days. In addition, there was mostly trading range price action for 3 days. This is not a particularly strong buy setup. Traders are still deciding if the Emini will have to pull back more before breaking strongly above 3,000.
Overnight Emini Globex trading
The Emini is up 7 points in the Globex session. It therefore might gap up today. A breakout above yesterday’s high will trigger a buy signal on the daily chart.
Since the daily chart is in a bull trend and 3,000 is a magnet above, there is an increased chance of a bull trend day today.
Can today be a big bear trend day? That is unlikely since today is triggering a buy signal in a bull trend on the daily chart. Also, yesterday’s reversal up was strong enough to have at least some follow-through today.
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 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 sold off for 3 weeks in a tight bear channel. Since the selloff had 3 legs down, it is a parabolic wedge and a sell climax. It is testing the June 18 low. The bulls want a reversal up from here, which would be a double bottom bull flag. They are hoping that the May 23 low is the start of a bull trend that will last for many months.
But the past 3 days had bear bodies. Additionally, the channel has been tight and there has only been one small bull bar in 3 weeks. Consequently, the first reversal up will probably be minor.
Since traders are starting to believe that the chart is in a bull trend, many are willing to buy and put a stop below the May 23 low. This is just in case the chart resumes up without a micro double bottom.
The bears want another new low in their yearlong bear channel. However, the weekly chart is now getting closes above the 20 week EMA and the daily chart is forming higher highs and lows. There is currently less than a 50% chance that the chart is still in a bear trend. It is clearly in a trading range and it is now also in an early bull trend.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart rallied 30 pips a few minutes ago. It broke above yesterday’s high. This triggered a minor buy signal on the daily chart.
While the bulls hope that this is resumption of the May/June bull trend, the bear channel on the daily chart is tight. The 1st reversal up is typically minor. Consequently, a 1 – 3 day bounce is more likely than a bull trend.
Because a bounce for a few days is more likely than a bull trend, day traders will be quick to take profits on longs if today’s rally stalls.
In addition, the bear day traders will look for this morning’s breakout to fail. They therefore will sell if there is a micro double top or a trading range with a good sell signal bar.
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 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 rallied on the open but sold off to a new low of the day. It reversed back up from above yesterday’s high then went sideways. Today was a doji day on the daily chart. It is therefore a weak sell signal bar. Consequently, the odds continue to favor sideways to up trading.
Most recent days have had a lot of trading range price action. Traders will expect tomorrow to also have at least one swing up and one swing down.
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 Intraday Market Update page.
Talking about the daily chart: Could you explain, please, why you call it a parabolic wedge if the slope indeed gets shallower in the last push (from 06/21 to 04/07) than in the previous one (from 06/11 to 06/21)?
I use broad definitions for everything because perfect patterns are rare. Someone waiting for a beautiful pattern like he might find in a book will rarely ever see it while trading.
For me, a parabolic wedge is 3 pushes in a tight channel. It is actually parabolic about half of the time. By parabolic, I mean the 3rd leg breaks beyond the line created by the 1st 2 legs. Undershoots are about as common as overshoots.
The key points are that the channel is tight and therefore it is unsustainable and climactic. And, there are 3 pushes. If the market repeatedly tries to do something and fails, it then usually tries the opposite.
That explanation was brilliant, just as all your work within this course. Thank you Master for exist and share your knowledge.
Ets de Barcelona ?