Emini and Forex Trading Update:
Friday April 24, 2020
I will update again at the end of the day.
Pre-Open market analysis
The Emini tested the open of the week and sold off yesterday. Today is Friday so weekly support and resistance can be important, especially in the final hour. Therefore, the open of the week might be a magnet again today.
It also reversed down from the 50 day moving average for the 3rd time this week. Consequently, traders see that as a magnet as well.
Yesterday is a sell signal bar for today on the daily chart. The bears are hoping that a 2 – 3 week selloff to below 2600 has begun. However, there might be one more push to a new April high first.
So far, this week in an inside bar on the weekly chart. If it remains an inside week, this week will be a High 1 bull flag buy signal bar on the weekly chart for next week.
After a 5 bar bull micro channel on the weekly chart, the odds favor at least slightly higher prices. For example, the 20 week EMA is just above. But there will probably be sellers above this week’s high at around the 20 week EMA.
Overnight Emini Globex trading
The Emini is up 27 points in the Globex session. That is a sign that traders are still paying attention to the open of the week and the 50 day moving average. Both could be magnets again today.
Yesterday was a bear channel on the 5 minute chart. Bear channels typically eventually have bull breakouts. Traders see them as bull flags.
If the Emini opens where it is now, it will be at the top of the channel. Also, with the magnets above, it will probably trade up to those magnets today.
The bulls want the week to have a bear body on the weekly chart. This week would then be a more reliable buy signal bar for a High 1 bull flag. That would make higher prices likely next week. The 20 week EMA is a magnet above for next week.
The bulls would prefer the week to close on its high. However, that might be too far above to get there today. If the bulls decide that it is unreachable, today might again oscillate around the open of the week and the 50 day moving average.
The overnight reversal up toward important magnets make a bear trend day unlikely. Since most days over the past 2 weeks have been trading range days, that is what traders expect again today. The open of the week could be an important magnet in the final hour if the Emini is within 10 – 20 points of it.
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 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 is reversing up from above the March 23 low. This follows 2 strong rallies in March. If today closes near its high, it would be a good buy signal bar for a higher low major trend reversal.
Also, since the 2 legs down from the March 27 high are forming a bull flag, this would additionally be a High 2 buy signal. A strong bull close today would make higher prices likely for the next couple weeks.
It is important to remember the point that I have made during every rally and selloff for 2 years. There is no strong trend. Traders expect every breakout attempt up and down to fail within a few weeks. They continue to look for reversals. This is a good candidate for the end of a 4 week selloff and the start of a 2 – 4 week rally,
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market reversed up from below yesterday’s low overnight. It is now almost back to last week’s low.
Remember, last week was a Low 2 sell signal bar on the weekly chart. One goal for the bulls today is to get this week to close back above last week’s low.
That is around the midpoint of this week. If they get the week to close above its midpoint, the week would be slightly more bullish than bearish, even with a bear body.
The overnight 80 pip rally has been in a tight bull channel. Day traders have only been buying. They will continue to buy for swings and scalps today. If there is a 30 pip pullback, some will begin to sell for scalps as well.
After a strong reversal up with good context on the daily and weekly charts, a bear trend is unlikely today.
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 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
The Emini had trading range price action for the 1st half of the day. The bears were unable to trigger the sell signal on the daily chart by breaking below last week’s low. Instead, the bulls rallied in a Small Pullback Bull Trend to above the open of the week. Today is now a High 1 buy signal bar for Monday.
On the weekly chart, this week is also a High 1 bull flag buy signal bar for next week. Since the 20 week EMA is an important magnet and is nearby, the Emini will probably get there next week.
Because the buy climax on the daily and weekly charts is extreme, traders expect a 2 – 3 week pullback to below 2600 to begin within a few weeks. That pullback might already be underway, but it is more likely that there will be one more new high first..
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 Market Update page.
Hi Al,
I noticed in your End of Day Summary you said that the “bullies” rallied. Was that intentional or perhaps a Freudian slip? In either case, I found it amusing.
-JB
It was just a mistake. I write and edit quickly, especially at the end of a day of trading, and sometimes “rallies” can end up as “bullies.”