Emini and Forex Trading Update:
Friday July 17, 2020
I will update again at the end of the day.
Pre-Open market analysis
The Emini triggered a sell signal yesterday by trading below Wednesday’s low. Traders see a 3 day micro double top and a double top with the June high.
But yesterday was a small trading range day. That is a weak entry bar for the bears. Also, Wednesday was a doji bar, which is a weak sell signal bar. Finally, the gap above the February 24 high is a strong magnet above. Consequently, traders expect a test into that gap this month.
Yesterday was a one day pullback in a Small Pullback Bull Trend. It is therefore a High 1 bull flag buy signal bar. But it was only a small bear bar. Also the Emini is just below the top of a 2 month trading range. This is not a strong buy setup, even though the Emini will probably work higher over the next week.
Weekly support and resistance
Today is the final day of the week. It affects the appearance of the candlestick on the weekly chart.
The week has spent a lot of time around the open of the week. If it closes there, this week will be a doji bar on the weekly chart.
The bulls want the week to close on its high. That would increase the chance of higher prices next week.
The low of the week is probably out of reach. The best the bears can probably do is get a close below the open of the week.
Overnight Emini Globex trading
The Emini is up 20 points in the Globex session. It is being drawn up to the magnet of that gap on the weekly chart. It should get there today or within a few days. There is therefore an increased chance of a bull trend day.
Can today be a 3rd consecutive bear day on the daily chart? Of course, but traders expect a test above the February 24 high before there is more than a few days of selling. Consequently, the odds favor higher prices.
Yesterday was a trading range day. Also, as a doji day on the daily chart, it is a weak buy signal bar. Trading range days are more common than trend days. Therefore, day traders expect at least one swing up and one swing down today.
The 2 most powerful magnetic forces today are the gap above the February 24 high and the open of the week. The Emini might spend today in a trading range between those magnets and then get drawn to one of them in the final hour.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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 has been rallying in a Small Pullback Bull Trend since June 19. Yesterday was another small pullback. There is no top yet and the March high is major resistance and therefore a strong magnet. Traders expect the rally to get there next week.
The bears want a micro double top with Wednesday’s high. They would see that as a lower high double top with the March high. Furthermore, the rally from the March low has had 3 legs up. It is therefore a wedge. The 2nd leg up in a double top often is a wedge rally. If the bears get a strong reversal day next week, it would be a credible sell setup for a test down to the June 19 bottom of the June trading range. Currently, the odds favor the bulls for at least another day or two.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market has rallied over the past 5 hours. Yesterday is a High 1 buy signal bar on the daily chart. Since it has a bear body and its high is far above today’s low, it is not a strong buy setup for today. Also, it is only 12 pips above today’s high. This combination of facts means that the EURUSD will probably not go much higher today. Consequently, it will probably enter a trading range.
Because the 5 hour rally has been strong, day traders have only been buying. But day traders do not think there is much left to the upside today. They expect a trading range.
The bears will begin to look for sell scalps. Because today is a bull trend, the bulls will continue to buy. But with a trading range likely, they will switch to buying 10 – 20 pip pullbacks and scalping.
Today could always reverse down. But it will probably have to transition into a trading range for a couple hours first.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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 reversed down from the open from above yesterday’s high. It then reversed up from above yesterday’s low. From there, it went sideways around yesterday’s high for several hours. It broke to a new high late in the day, but closed just below the open.
The past 2 Monday’s gapped up on the weekly chart. That created a 4 month island bottom with the February 24 gap down. But both gaps closed by the end of the day, ending the island bottom.
Next week might try again for the 3rd time. Traders know that the Emini will probably enter that February gap next week. The expectation could be great enough for a gap up and a 3rd consecutive attempt at a 4 month island bottom.
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.
