Emini and Forex Trading Update:
Friday July 12, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini had another trading range day yesterday. The bulls bought the early selloff, but were unable to rally strongly. The bears got a reversal down. Yet, the bulls bought the new low and the test of the 60 minute EMA. Yesterday was the 4th doji bar on the daily chart in the past 5 days. That is a sign of a balanced market.
There is a parabolic wedge buy climax on the daily chart. However, the bears do not yet have a sell signal bar or a strong reversal down. They will probably get one within a week or so. Traders will then look for a 2 – 3 week pullback.
Today is Friday and therefore weekly support and resistance can be important, especially in the final hour. The bulls want the week to close on its high and above last week’s high. Additionally, they want the 1st weekly close above 3,000.
It is unlikely that the week will close below its open. The best the bears can probably hope to get is a close below the midpoint of the week.
Overnight Emini Globex trading
The Emini is up 6 points in the Globex session. It might have a small gap up open today. Since 4 of the past 5 days were dojis candlesticks, each has had at least one reversal. Traders will expect at least one reversal again today.
Yesterday was an inside bar in a bull trend. It is therefore a buy signal bar for today. But it was a doji, which typically does not lead to a strong bull breakout.
Six of the past 7 days were bull days on the daily chart. The bulls want another bull day today. Furthermore, they want this week to close above last week’s high. This week would then be the 1st weekly close above 3,000.
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 reversed up 3 days ago from a double bottom. While the entry bar 2 days ago was good, the buy signal bar was a bear doji. Furthermore, there was only one small bull bar in the prior 14 days. That was a weak buy setup. That is why I said that reversal would probably be minor and need a test of the July 9 low.
Yesterday was only a small bull doji. The bulls needed a 2nd consecutive strong bull bar. Because they did not get it, there is now a weak rally after a weak bottom. Traders expect at least a small test down within a few days.
The bears want a strong reversal down to a new 52 week low. At the moment, the bull case is slightly stronger. Consequently, there will probably be more buyers than sellers below yesterday’s low and around last week’s low.
While the chart is in Breakout Mode, the bulls have done more over the past month than they have in a year. There is better than a 50% chance of a break above the June high before there is a break below the May low.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart rallied and sold off 30 pips overnight. Today therefore is forming a micro double top with yesterday’s high. Yesterday was a doji bar on the daily chart, and today so far is also a doji bar. This is a balance market and there is an increased chance of continued trading range price action today.
The bears see yesterday as a sell signal bar on the daily chart for a lower high. Since it is a weak sell signal bar and the pattern is weak, there will probably be more buyers than sellers below yesterday’s low.
The 5 minute chart is now just above yesterday’s low. This is the buy zone. The odds are against a strong bear trend from here today.
With the quiet trading over the past 2 days and now a micro double top, there will probably not be a strong bull trend either. Day traders will continue to scalp, betting on reversals.
Weekly support and resistance are important on Friday’s
Today is Friday and therefore weekly support and resistance can be important. The most significant price is 1.1208, which is the open of the week. This is because last week sold off and the bulls want a higher low buy signal on the weekly chart for next week. It would be stronger if the candlestick had a bull body. That requires a close above the open of the week.
The bears always want the opposite. But that price is more than 30 pips below and the overnight selloff has been weak. As a result, the odds are that this week will have a bull body on the weekly chart.
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 formed a small pullback bull trend day and it closed on its high. Next week might gap up to another new high. Whether or not there is a gap up, the odds still favor at least slightly higher prices. This week was also the 1st weekly close above 3,000.
Although there is a parabolic wedge buy climax on the daily chart, there is no top yet. Also, since the monthly chart is on an oo buy signal, any reversal down will probably just last 1 – 3 weeks.
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.
Hi, the US stock market closes at 4pm. So how come you always have prices until 4:15 on your charts?
Hi Edward,
Al is trading and using the S&P500 Emini ES instrument (futures) and not the stock market. The futures market closes at 4:15pm for a short while and then opens again for the overnight Globex.
Also, Al trades the day session, so his chart starts at US stock market open: 9:30am Eastern Time / 6:30am Pacific Time.