Thursday April 4, 2019
I will update again at the end of the day.
Pre-Open market analysis
Although the Emini gapped up yesterday, it was a trading range day. Yet, the daily chart continues to work higher. The bulls want a break above the 2900 Big Round Number and then a new all-time high.
But, the weekly buy climax might be a problem for them. It could be too good. The bulls bought the 1st pullback in the 10 bar bull micro channel. There is typically a new high in the channel, and there has been. Then, however, the bulls often take profits.
This can result in a deeper, longer pullback. For example, TBTL (Ten Bars, Two Legs). On the weekly chart, that is a couple of months.
At the moment, there is a 50% chance of this coming before there is a new all-time high. If the Emini goes straight up to a new high, it will probably then enter a broad trading range for several months.
The weekly chart is important
Tomorrow is Friday. It therefore determines how this week will look on the weekly chart. So far, the week is a small bull bar. But, this week is the 3rd push up in 6 weeks in a tight channel. That is a parabolic wedge rally. There is therefore an increased chance of a reversal down next week.
However, the bears will probably need a bear bar on the weekly chart this week before they can get a reversal. Therefore, traders should watch for a possible reversal down to Monday’s open today or tomorrow.
Overnight Emini Globex trading
The Emini is down 1 point in the Globex session. There have been many strong swings down on the 5 minute chart over the past 2 weeks. Each one turned out to be a bull flag. The bulls have been refusing to give up, and the daily chart continues to work higher.
Yesterday’s strong, late reversal up increases the chance of follow-through buying in the 1st 2 hours today.
Most days over the past 2 weeks have had both a swing up and a swing down. That therefore is likely again today.
On the daily chart, Tuesday was a bear day and therefore a bad buy signal bar. That is part of the reason for yesterday’s selloff. Yesterday was also a bear day. It is therefore a weak entry bar. The Emini might have to go sideways today before going higher.
Also, it might wait until tomorrow to decide whether to close near the top or bottom of the week. A close near the top will increase the chance of a new all-time high within a couple months.
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. 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 reversed down overnight after yesterday’s one day bounce. The bulls expect at least a small 2nd leg sideways to up after the 2 week sell climax down to the bottom of the 4 month trading range. Consequently, they will probably buy this selloff.
The bears want today to close near its low. It would then be a bear day on the daily chart. That would make it a Low 1 bear flag and a sell signal bar for tomorrow.
However, the 4 month trading range has had many attempts to break out of the top and bottom. Each has failed. In addition, there will be more Brexit news within the the next 2 weeks. That is another reason against a bear breakout this week.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart sold off 40 pips overnight. It has retraced about 50% of the rally from Tuesday’s low. The odds are that the selling will stop within the next couple of hours.
But, the overnight bear channel has been tight. Therefore, the bulls might need to transition into a trading range for an hour or two before they can begin a rally.
Neither the 2 day rally nor the overnight selling has been strong. They look like legs within a developing trading range. Day traders are therefore looking for both buy and sell scalps, expecting a trading range today and tomorrow.
Everyone knows that there will likely be a sharp 200 – 400 pip move beginning soon. But, no one knows if it will be up or down. Day traders are waiting for a 50 – 100 pip strong breakout either way before they will aggressively swing trade. In the meantime, they are mostly scalping up and down for 10 – 20 pips.
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. 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 continued yesterday’s rally on the open. After a 17 bar bull micro channel, it sold to test yesterday’s low and the 60 minute EMA. It rallied from a wedge bottom and closed near the middle. Today was a doji inside day on the daily chart. It is therefore both a buy signal bar and a sell signal bar. However, it is a weak bar for both the bulls and bears.
Tomorrow is Friday and the weekly candlestick is currently a bull bar. If the bulls can close the week on its high tomorrow, they will increase their chance of a new all-time high within a couple of months.
The bears want a selloff tomorrow. They would like the week to close near its low. It would then be a sell signal bar for a 6 week small wedge on the weekly chart. The odds are against a big bear trend day tomorrow.
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.
