Emini and Forex Trading Update:
Thursday May 2, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini rallied yesterday up to the all-time high before and again after the FOMC report. It exactly hit 2956.00 twice and turned down both times.
Yesterday was an outside down day after Tuesday’s outside up day. That is consecutive outside days (an oo pattern). When that happens in a bull trend, it is a sell setup. If today trades below yesterday’s low, the odds would favor a 2 – 3 week pullback at a minimum. However, if the bulls get a strong bull bar today on the daily chart, it will undo yesterday’s damage.
Overnight Emini Globex trading
The Emini is unchanged in the Globex session. The bears need today to trade below yesterday’s low. That would trigger a significant sell signal on the daily chart. The odds would then favor a couple legs down on the daily chart over the next 2 – 3 weeks. Traders should expect this possibility even if the Emini goes sideways over the next few days after triggering the sell signal.
With tomorrow’s unemployment report being a potential catalyst, the Emini has an increased chance of going sideways today. This is true regardless of whether the Emini triggers the sell signal.
In addition, after yesterday’s sell climax, there is a 75% chance of at least 2 hours of sideways to up trading today that begins by the end of the 2nd hour. There is only a 25% chance of a strong bear trend from the open.
The bulls do not want the sell signal to trigger. They will buy at and above yesterday’s low. If they can prevent today from trading below yesterday’s low, today would be an inside day on the daily chart. There would then be an ioi (and inside day after an outside day) on the daily chart. That would be a bull flag. They they would again try to break to a new all-time high next week.
If today triggers the sell signal, the bulls will try to create a strong bull trend day. Today would then be a buy signal bar on the daily chart. However, if the oo sell signal triggers, it is more significant. The odds would favor lower prices for a couple weeks.
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 formed a bear reversal day at the 20 day EMA yesterday. It is a Low 1 bear flag in a 10 month bear channel. But, after 3 bull days, the bears will probably need a micro double top before they get a new low. That was the case with all other bear rallies to the EMA. Consequently, even though today would trigger a sell signal by breaking below yesterday’s low, there will probably be buyers not far below yesterday’s low.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has been in a 30 pip range overnight. It is within yesterday’s range. On the daily chart, yesterday is a sell signal bar at resistance in a bear trend. Today will probably fall below yesterday’s low.
However, after a 4 day tight bull channel on the 60 minute chart, there will probably be buyers below yesterday’s low down to around the April 26 high. Consequently, the 3 day tight trading range will probably continue for at least a couple more days. Day traders will look to scalp reversals 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. 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 triggered an oo sell signal today by trading below yesterday’s low. After a parabolic wedge sell climax, it reversed back up to the middle of the day. Today is therefore somewhat neutral ahead of tomorrow’s unemployment report. However, the odds now favor 2 – 3 weeks of sideways to down trading. This is true even if the Emini bounces for a couple days.
Tomorrow is Friday so it determines the appearance of this week’s bar on the weekly chart. Therefore, this week’s open, high, and low are magnets, especially in the final hour.
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.
