Emini and Forex Trading Update:
Tuesday March 23, 2021
Pre-Open market analysis of daily chart
- Yesterday triggered High 1 bull flag buy signal on daily chart near end of 1st quarter. Magnets above are the 3,950 and 4,000 Big Round Numbers, and last week’s all-time high.
- Bulls hope there will be enough end-of-quarter window dressing to test 4,000 by end of March.
- Since yesterday was a buy climax day on the 5-minute chart, there is a 75% chance of at least a couple hours of sideways to down trading, starting by the end of the 2nd hour today.
- Increased chance of trading range trading today: Day after buy climax day; yesterday was 50% pullback of last week’s selloff; and now at middle of 8-day trading range.
Overnight Emini Globex trading on 5-minute chart
- The Emini is down 11 points in the Globex session.
- Yesterday’s bull trend immediately reversed into bear trend without any transition. That is unusual and reduces chance that today will gap down and form Bear Trend From The Open.
- If there is an early bear trend, there will probably be an opening reversal up, into trading range or bull trend.
- If Emini enters a trading range for an hour or two, the bears will have a better chance of then getting a bear trend day, from a possible lower high major trend reversal.
- Bulls are hoping that yesterday’s late selloff and today’s gap down is just a pullback from yesterday’s strong bull trend.
- Big Up, Big Down creates Big Confusion, which increase chance of early trading range today.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Small double top and double bottom, so Breakout Mode. If today remains a big bear day, odds of bear breakout will be greater than for bull breakout.
- Bears see yesterday as a pullback after reversal down from double top. They see today as resumption of selloff. They need close below double bottom to get breakout below small trading range.
- Bulls hope today is just a pullback after yesterday’s reversal up.
- Last week is bear inside bar on weekly chart and a Low 1 sell signal bar. The bears yesterday triggered the weekly sell signal when EURUSD fell a fraction of a pip below last week’s low. But, EURUSD reversed up strongly all day yesterday, creating a possible failed Low 1 sell signal.
- The bears are trying to trigger the weekly sell signal again today.
Overnight EURUSD Forex trading on 5-minute chart
- EURUSD sold off in bear trend from yesterday’s close, and now near yesterday’s low at the bottom of small trading range on daily chart.
- Day traders have only been selling overnight, but might get bounce or trading range on 5-minute chart, since now at bottom of trading range on daily chart.
- Bears want today to continue down to far below last week’s low, and to close on the low of the day. That would increase chance of 100-pip measured move down, based on height of 2-week trading range.
- Bottom of 2-week trading range is support. If there is 20-pip bounce, day traders will start buying reversals up, betting on bear trend evolving into trading range or reversing up. The bears will continue to sell, but once there is a 20-pip bounce, they will wait to sell rallies instead of at the market.
- Bears will continue to sell unless there is a series of strong bull bars, which would be a bull trend reversal.
- Key price is yesterday’s low, which is a fraction of a pip below last week’s low.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Opened with small gap down and reversed up from High 2 bottom. Rally was likely to be a leg in a trading range since bad buy signal bar and strong trend down from yesterday’s high.
- Reversed down from parabolic wedge at EMA and a double top with yesterday’s close.
- Reversed up from lower low double bottom and sell climax.
- Reversed down again from double top lower high major trend reversal.
- Bear breakout below trading range continued for measured move down to below yesterday’s low and 3,900 Big Round Number, but closed above both.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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 Time
When I mention time, it is USA Pacific Time (the Emini day session opens at 6:30 am PT, and closes at 1:15 pm PT). You can read background information on the intraday market reports on the Market Update page.