Emini and Forex Trading Update:
Friday November 27, 2020
I will update again at the end of the day.
Pre-Open market analysis
Wednesday was an inside day after a big bull trend day on the daily chart. It is therefore both a buy and sell signal bar for today.
Some brokers show Thursday on their charts. Thursday was a bear day and it traded below Wednesday’s low. While the bears see it as the start of a reversal down, it is also a pullback from Monday’s rally. It is therefore a High 1 bull flag buy signal bar. But because it has a bear body, it is a weak buy setup.
On the weekly chart, last week was a High 1 buy signal bar. The bulls will try to get this week to close above last week’s high. That would increase the chance of at least slightly higher prices next week.
It is important to note that today has an early close at 10:15 AM PST. If today has a lot of small, sideways bars for the 1st hour, it will probably be better to not trade and instead wait for Monday.
Can today be a big trend day? The day after Thanksgiving is usually small. Therefore, if there is a trend, it will probably not be big. But if there are a few consecutive trend bars up or down early in the day, day traders will look for a swing trade.
Overnight Emini Globex trading
The Emini is up 23 points in the Globex session. It therefore might gap above yesterday’s high. If so, the gap will be relatively small. The smaller a gap is, the more likely it will close.
Is this one so small that it should close? It’s borderline. The bulls will buy an early, brief selloff and try to keep the gap open. There is therefore an increased chance of an early low of the day, and then a bull trend day.
Yesterday’s range was small. Therefore, if today gaps up and has several consecutive bear bars, traders will look for a bear trend, and a possible break below yesterday’s low. Today would then be an outside down day at the top of a 3 week range. That would increase the chance of lower prices next week.
Today is Friday so weekly support and resistance can be important, especially in the final hour. The bulls want this week to close above last week’s high. That would increase the chance of higher prices next week.
Today will probably have a small range. If there is going to be a trend, up is more likely. But, a small day with an early close does not offer a lot of profit potential. Day traders will look for early signs of a trend and then enter early, hoping for to capture as much profit as they can in what will probably be a small day.
While a big trend day is unlikely, if there are several big bars in one direction in the 1st hour, traders will be more aggressive. That could create a big trend day.
Wednesday’s setups
Here are several reasonable stop entry setups from Wednesday. 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
The EURUSD Forex market on the daily chart has poked above the September 10 high each of the past 3 days. The bulls want a breakout and then a test of the September 1 high. That is the top of a 4-month trading range and the highest price in 2 years.
Throughout November, the bulls have been trying to get a close above the September 10 high. At the moment, the EURUSD is just above that high. If today can close above that high, traders will expect higher prices next week. The next resistance is the September 1 high.
If a market repeatedly tries to do something but fails, it usually then tries to do the opposite. If there is suddenly a big bear bar closing on its low within the next week, traders will conclude that the bulls are selling out of their longs and giving up. That should probably lead to a test of support at the November 4 low.
Overnight EURUSD Forex trading
The 5-minute chart of the EURUSD Forex market has been in a 15-pip range for the past 8 hours. Day traders are having a difficult time making even a 10-pip scalp.
But what is important today is that the overnight trading range is just above the September 10 high. The bulls will be happy having the range last until the close. If it does, the EURUSD will have closed above that top of the 3-month trading range for the 1st time.
Also, on the weekly chart, this week will be an outside up bar closing on its high. Both of these charts will probably trade higher next week. Traders will expect a test of the September 1 high within a couple weeks.
Since today is at a critical price, there is an increased chance of a surprisingly big day in either direction. But with many US traders and institutions not trading today, the day will probably remain small. The focus will be the close. Can the bulls finally get a close above the September 10 high?
Summary of today’s S&P Emini futures price action and what to expect tomorrow
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.
End of day summary
Today had an early close, and that increased the chances of a lot of limit order trading and a small range. The Emini had a small wedge rally to a double top and that remained the high of the day. The selloff formed consecutive wedge bottoms and the bulls got a reversal back up to near the open. Today was a bear doji bar on the daily chart.
While the bears want a reversal down from a double top, the momentum up 3 weeks ago was strong enough for traders to expect a new all-time high next week. Monday might even gap to a new high. That gap would also be present on the weekly chart.
On the weekly chart, this week closed on its high and above last week’s high. Traders expect at least slightly higher prices and probably a new all-time high next week.
Monday is the final day of the month. The bulls want November to close at a new all-time high. Since November is a big bull bar, traders expect at least slightly higher prices in December.
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.
