Trading Update: Friday July 2, 2021
Emini pre-open market analysis
Emini daily chart
- Broke above 4,300 Big Round Number yesterday for the 1st time. Market has stalled at every Big Round Number over the past year, except 4,000. This increases the chance of at least a couple sideways days next week.
- Yesterday was the 10th day in a bull micro channel, which is an unusual bull streak. This increases the chance of a 1- to 3-day pullback coming within a week.
- 60-minute chart (not shown) has not pulled back to its 20-bar EMA in 56 bars. That it an extremely unusual streak, and it increases the chance of a pullback to its EMA within a couple days.
- Bull trend is very strong on daily, weekly, and monthly charts. Traders will buy the 1st 1- to 3-day pullback.
- Next target is around 4,400, which is a measured move up based on the 3-month trading range.
- Incidentally, the Emini gapped up yesterday on the monthly chart. The gap was only 1 tick, and it closed in the 1st few minutes. Small gaps typically quickly close.
Emini 5-minute chart and what to expect today
- Emini is up 14 points in the overnight Globex session so probably will gap up
- Extreme buy climax on daily and 60-minute charts so probably will get bear trend day within a few days.
- Strong bull trend so traders continue to bet on higher prices, despite buy climax, but growing chance of bear trend day.
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. These therefore are swing entries.
It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.
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
- Yesterday broke a little below June 18 sell climax low.
- It closed just above that low so that was a weak breakout.
- Today broke further down but reversed up after the unemployment report.
- If today closes near its high, traders will see the past 5 days as a micro wedge bottom. That would increase the chance of a bounce next week.
- June 25 sell signal bar was only a doji and the selloff since then has not been very strong. This increases the chance of a bounce within a few days.
- Bulls want a lower low double bottom with June 18 low and then a breakout above June 25 high, which is the neckline of the double bottom.
- Bears want the selloff from the May 25 high to break below the March 31 low, which is the neckline of the January 6/May 25 double top. It is also near the November 4 low, which is the bottom of the yearlong trading range.
- Since EURUSD has been sideways for a couple weeks and is now at the bottom of a possible small trading range, it should bounce soon.
- Reversal down to June 18 low was strong enough for traders to expect a test of the March 31 low before there is a strong breakout above the June 25 high.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Gap up to new all-time high, and then strong Bull Trend From The Open.
- 20 Gap Bar buy late in day.
- Buy climax day so Tuesday has 75% chance of a couple hours of sideways to down trading that starts by the end of the 2nd hour.
- 11-day bull micro channel so probably will get pullback next week, but bulls will buy the pullback. Therefore, limited downside risk next week, despite extreme buy climax.
- 60-minute chart has 69 bars above the EMA, which is extremely unusual, so will go sideways to down to EMA next week.
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. I end the chart at 1:15 pm PT, which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.
During the afternoon session or mid session (for a period of 1 to 2 hrs) the market is in a sideways move and sometimes makes me to take wrong decisions and confusions happen.
Can we avoid trading during that time period?
Traders looking for swing trades, which means most traders, should not trade. If they are in a swing trade and there has been no good reason to exit, they can hold.
thanks for the reply sir.