Emini has room to top of August trading range

Emini and Forex Trading Update:
Thursday August 22, 2019

I will update again at the end of the day.

Pre-Open market analysis

With yesterday’s close at the high of the day, there is an increased chance of at least slightly higher prices today in the Emini. However, the Emini is now near the top of its 3 week trading range. Most trading range breakouts fail. Disappointing follow-through after big moves up and down is common. Even if the bulls get a break above last week’s high, there would still be a 50% chance of a test below 2800 before there is a new high.

Overnight Emini Globex trading

The Emini is up 3 points in the Globex session. With yesterday’s late rally, the bulls want follow-through buying today. However, the Emini is near the top of its 3 week range and yesterday was a trading range day. This reduces chance of a big bull day today.

The bears have a micro double top on the daily chart. But yesterday’s bull body make it a weak sell signal bar. This reduces the chance of a big bear day.

Traders are deciding whether the Emini will resume its yearlong bull trend or get a 2nd leg down after the August selloff. There is no evidence yet that the Emini is about to have a big move either way. Today will more likely be either a weak trend day up or down or another trading range day.

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.

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 had a micro double bottom over the past few days. When today traded above Tuesday’s high, it triggered the buy signal.

Yesterday was a bear day on the daily chart and the 2nd sell signal bar in 3 days. It was therefore a Low 2 bear flag sell setup. When today went below yesterday’s low, today triggered the sell signal. Since it also went above yesterday’s high, today is now an outside day.

Today triggered both a minor buy signal and a minor sell signal. But the range is small and it is the 5th day in a tight trading range. Traders are deciding if the 2 week selloff will lead to a new low or a higher low. The odds are 50% for each possibility.

However, since every new low over the past year reversed up for a few weeks, traders will look for a reversal up within the next couple weeks from either a higher low or from below the August low.

Overnight EURUSD Forex trading

The EURUSD 5 minute Forex chart rallied to above yesterday’s high and then reversed down to below yesterday’s low. It quickly revered back up to the middle third of the overnight range.

The selloff was in a tight bear channel. Today will probably not get back above the overnight high. While the bears want a trend down from the 25 pip bounce over the past hour, tight trading ranges resist breaking out. Consequently, the bears will probably not get a big move down from here. Traders are expecting a continuation of the 5 day tight trading range.

If there is going to be a trend today, down is more likely than up after the selloff from above yesterday’s high to below its low.

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.

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 had a climactic selloff on the open. It reversed down from above yesterday’s high, but it then reversed up from below yesterday’s low. That strong a selloff in a trading range typically is exhaustive. Traders expected and got a reversal up. The rally went briefly back up to yesterday’s high. Today closed in the middle of the day’s range and near the open of the week.

Today was just a big doji bar on the daily chart. It therefore does not have much bearing on tomorrow.

Tomorrow is Friday and therefore weekly support and resistance might be important in the final hour. The weekly candlestick currently also is a doji bar. The bears want the week to close below the open so that there will be a bear body on the weekly chart. The bulls want a close above last week’s high.

After 4 sideways days, tomorrow will also probably have a lot of trading range price action. If so, the week would remain as a doji bar on the weekly chart.

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.

---