Emini and Forex Trading Update:
Monday March 15, 2021
I will update again at the end of the day.
Pre-Open market analysis
As was likely, Friday pulled back from a new high and a 6-bar bull micro channel on the daily chart. Also, there were buyers below Friday’s low. Friday is now a High 1 bull flag buy signal bar for today. The bulls are trying to break above the 3,950 Big Round Number and then the even bigger 4,000 Big Round Number. Will the Emini go far above 4,000? Too early to tell. However, it should go above Friday’s high, which would trigger the buy signal.
I said that traders would buy the 1st reversal down after a 6-bar bull micro channel in a bull trend. If today goes above Friday’s high, but the Emini reverses down today or tomorrow, the bears will have a micro double top. If either day closes on its low, there would then be a Low 2 top, as well as a higher high double top with the February 16 high. That would be a credible sell signal. However, even a good sell signal only has a 40% chance of leading to a trend reversal. Consequently, if the bears get their micro double top, it will more likely be minor. Traders expect a test of 4,000 in March.
The past 2 days were small and had reversals on the 5-minute chart. This is not yet a strong breakout above the February 16 high. It increases the chance that today will be sideways again as well. However, with the Emini near a critical price (4,000), there is an increased chance of a big trend day in either direction early this week.
Overnight Emini Globex trading
The Emini is down 1 point in the Globex session. If it opens around here, traders will expect today to trade above Friday’s high, which would trigger a High 1 buy signal on the daily chart. But with the Emini stalling for 2 days at the prior high, traders will look for another sideways day again today. But if there is a series of strong trend bars up or down in the 1st hour, they will switch to swing trading for a possible trend day.
While it is possible for today to break above 4,000, it is unlikely to do so. This is because that is 70 points above, and the average range for the past several days is much less than that. Also, the Emini has stalled at the February high.
Friday’s setups
Here are several reasonable stop entry setups from Friday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).
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.
If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.
EURUSD Forex market trading strategies
The EURUSD Forex market on the daily chart reversed down on Friday in a 3-month bear channel. However, there were 3 bull bars and there is now a wedge bottom. Friday formed a 2-bar reversal with Thursday. It is therefore another sell signal bar. But it has a big tail below. Also, it came after 3 bulls bars and a wedge bottom. Traders expect at least a couple legs sideways to up. Therefore, if today triggers the sell signal by breaking below Friday’s low, the EURUSD is more likely to enter a trading range than resume the bear trend.
Because the EURUSD is in a bear trend, if there is going to be a surprise, down is more likely. However, the wedge bottom has created some confusion. That typically leads to sideways trading, and at least a couple small legs up.
Overnight EURUSD Forex trading
The EURUSD Forex market sold off early in the overnight session on the 5-minute chart. However, it then entered a trading range for the past 6 hours just above Friday’s low. Day traders have been scalping reversals up and down.
The bears will try to trigger the sell signal on the daily chart by having the EURUSD break below Friday’s low. But even if they succeed, there will probably be buyers below, and below the March 9 low. This is because traders expect a small trading range after the wedge bottom on the daily chart. They will look to buy selloffs and sell rallies this week. This is true even if the EURUSD goes in one direction for several days, like it did with last week’s the 3-day rally.
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. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).
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.
If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.
End of day summary
After triggering the High 1 buy signal on the daily chart, the Emini sold off in a sell climax down to the February 24 high and the 60-minute EMA. It then reversed up sharply from a 2nd Leg Bear Trap to back above Friday’s high, again triggering the daily buy signal.
After a 20-Gap Bar pullback to the EMA, it rallied to a new all-time high at the end of the day. Today’s strong reversal up increases the chance of higher prices tomorrow. The bulls are hoping for a breakout above 4,000 this week.
There is always a bear case. If tomorrow reverses down strongly, which is unlikely after today’s strong rally, the bears will have a micro double top with Thursday’s high and a double top with the February 16 high. But the 2-week rally makes a big reversal down this week unlikely.
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 Time
When I mention time, it is USA Pacific Time (the Emini day session opens at 6:30 am PT, and closes at 1:15 pm PT). You can read background information on the intraday market reports on the Market Update page.
Dr Brooks hi I bought the close of the second big bear at around 8:35. Dr brooks where should I have put my stop? At the top of the first big bear bar at 8:30? Or the top of the bear leg for a swing trade?
Thanks for your time Dr Brooks.
Dear Al,
Isn’t bar 9 a failed BO of OO 4-6 and a H2 buy above EMA which should be reasonable?
Thank you.
The Emini never went above 9 to trigger that buy. Also, the OO was in a tight trading range and therefore less reliable.
Dear Al is their video i can watch to better understand the HI 1,2 and LO 1,2