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
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. Buyers of both 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
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
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. Buyers of both 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
- 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.
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 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.
Emini 5 minute. At the start of the next day’s session after a climax day, can you explain why the first 2 hours seems a consistent time period needed as a condition for the 75% probability conclusion of what is likely to occur by the end of the second hour?
Trying to understand the importance, if any, of the length of time (approximately 2 hours).
Thank you very much for any additional analysis.
Once a Small Pullback Bull Trend lasts about 50 bars, bulls start to take profits. “Exhausted” bulls need to reduce risk, and the easiest way is to reduce their position size.
They like to wait about half as many bars (about 2 hours) before they buy aggressively again. They want to be sure that the profit taking will not lead to aggressive selling by the bears, which could create a trend reversal.