Emini and Forex Trading Update:
Thursday April 11, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini formed a trading range day yesterday, but had a small, late bull breakout. By going above Monday’s high, yesterday triggered High 1 bull flag buy signal on the daily chart.
There is a magnet above at 2900. The Emini will probably test above it today or tomorrow. If the bulls can get 2 closes above it, the odds will favor a continuation up to the all-time high within a month.
On the other hand, there is a nested wedge on the daily chart and a buy climax on the weekly chart. If the bears can begin to create bear days, the odds will switch in favor of a 2 month pullback. The Emini has been sideways for 6 days because traders are deciding between the 2 alternatives.
Tomorrow is Friday and therefore the weekly chart is becoming important.
The past 7 weeks have formed a small wedge rally on the weekly chart. So far, this week is small. It is therefore a bad follow-trough bar on the weekly chart after the 2 week rally. If the bears can close the week below the open, this week will be a sell signal bar for next week for a small wedge top.
Overnight Emini Globex trading
The Emini is up 3 points in the Globex session. The bulls will probably get a break above 2900 today or tomorrow. If they fail, there will be a micro double top on the daily chart with Monday’s high. When a market tries to go one way several times and fails, it then typically tries to go the other way. As a result, if there is a rally to around 2900 but it begins to reverse, the selloff could lead to one or more bear trend days.
Can the bulls get a big break above 2900? While it is possible, the daily and weekly charts are late in strong bull trends. The bulls might start to take profits on strength.
For example, if there is a big bull trend day closing far above 2900 within the next week, the bulls might sell the close instead of buying more. Their thought could be that it is too extreme and therefore unlikely to go much higher. It would then be a great opportunity to take a big profit that might be brief. That is how an exhaustive buy climax works.
Most days over the past 2 weeks had a lot of trading range price action. Since markets have inertia, today will also likely have at least one swing up and one swing down.
Because of the repeated tests of 2900, there is an increased chance of a big trend up or down. But, with the week being small, it will probably stay small and close around the open of the week.
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 has been sideways for 3 days at the EMA. In addition, the rally up from the double bottom has lacked consecutive big bull bars closing near their highs. Consequently, the rally is probably not the start of a trend up to the March high.
More likely, it is either a bear flag or a bull leg in a trading range. A bear flag means that the bears expect a strong break below the April low.
But, a bull leg in a trading range means that there will be buyers around the April low and they will get a 2nd reversal up from there.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart formed a triple top over the past 3 days. In addition, the rally on the 240 minute chart has had 3 legs up and is therefore a wedge. A wedge rally is a type of buy climax. As a result, the odds favor a test down. The 30 pip selloff over the past 90 minutes might be the start of a test down to 1.12.
There were 4 days in early April with lows just above 1.12. Consequently, it is a magnet below.
Most of the trading over the past 10 days has been within days that largely overlapped the prior day. So far, today is another example. Its high has been a fraction of a pip above the highs of yesterday and Tuesday.
Yesterday was a big day so today is unlikely to trade below its low. In addition, the selloff on the 5 minute chart so far lacks consecutive big bear bars. Therefore, there is not sustained, strong selling. This will make traders expect a trading range soon.
Once the selling stops, the bulls will buy reversals up from prior lows. The bears will look to sell rallies. Both will probably only scalp for 10 pips unless there is an increase in the size of the bars and of the legs.
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 tried again for the third time in 5 days to break above 2900. It could not and there was a strong midday reversal down.
Today was a bear trending trading range day and it closed back around the bottom of the upper trading range. Therefore, the bulls have not yet given up. They may try again to get above 2900.
The bears now have a micro double top on the daily chart. There is a nested wedge as well. However, today had a big tail below and is a weak sell signal bar. The bears need a strong reversal down next week. Otherwise, the bulls will get their breakout above 2900.
The open of the week has been a magnet all week. Traders might wait until the final hour tomorrow to decide whether to close the week above or below the open.
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.
