Emini and Forex Trading Update:
Thursday June 20, 2019
I will update again at the end of the day.
Pre-Open market analysis
Yesterday had a huge, brief rally on yesterday’s FOMC report, but then entered a broad bull channel. Yesterday as an inside bar on the daily chart and a buy signal bar for today. The bulls want a new all-time high today.
I mentioned several times since early June that June might be an outside up month on the monthly chart. Since May was an outside down month, this would create consecutive outside months.
This is a reliable buy signal, especially if June closes above the May high. June would then be a buy signal bar for July. If July then goes above the June high to trigger the signal, the odds would favor several more months of higher prices.
Overnight Emini Globex trading
The Emini is up 29 points in the Globex session. There will therefore be a big gap up today. Additionally, today might gap up to a new all-time high. A big gap increases the chance of a bull or bear trend from the open.
However, there is an 80% chance of at least one reversal in the 1st hour or so. Traders know that there is only a 20% chance of a strong trend up or down on the open that lasts all day.
Whenever there is a big gap up, the Emini is far above its average price. Many traders prefer to buy closer the 20 bar EMA. Consequently, the Emini usually enters a trading range over the 60 – 90 minutes. The bulls look to buy a wedge bull flag or double bottom around the EMA.
There is also an increased chance of a bear trend. The bears want a wedge top of double top in the 1st hour. They then hope for a bear trend day.
When there is a early trading range, the day tends to again have trading range price action late in the day. The result is that most big gap days do not lead to the strongest trends up or down.
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. Buyers of the Brooks Trading Course have access to a much more detailed explanation of the swing trades for each day.
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.
EURUSD Forex market trading strategies
The EURUSD daily Forex chart is reversing up from the right shoulder of a head and shoulders bottom. This is a higher low major trend reversal. A major trend reversal up has a 40% chance of about a 200 pip measured move up to around the January high.
That means there is a 60% chance that the rally will not lead to a bull trend. When a rally is not the start of a bull trend, it is either a bull leg in a bear channel or in a trading range.
Traders will become more confident of a bull trend if the rally begins to form many bull bars closing near their highs over the next few weeks and consecutive closes above the April/June neck line of the head and shoulders bottom.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart rallied 100 pips overnight in a tight bull channel. This makes a bear trend unlikely today. Furthermore, it has been difficult for the bears to make even a profitable scalp. Consequently, day traders will continue to buy pullbacks.
At some point, the tight bull channel will begin to enter a trading range. When it does, bear scalpers will look for 10 pip scalps. However, the bulls will buy 20 – 30 pip pullbacks for swing trades and scalps. It probably will be easier to make money as a bull all day.
Today might be the start of a bull trend on the weekly chart. Therefore, traders who trade the daily and weekly charts will also be buying, especially if this rally starts to go above prior highs on those charts over the next few weeks.
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. Buyers of the Brooks Trading Course have access to a much more detailed explanation of the swing trades for each day.
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.
End of day summary
After gapping up to a new all-time high, the Emini sold off and closed the gap. It then reversed back up and formed a trading range day. This hesitation at the old high is a sign of uncertainty. It therefore increases the chance of 2 – 3 more days with trading range price action.
Since June went above May and May was an outside down month, there are now consecutive outside bars on the monthly chart. This is a buy signal for July. If July trades above the June high, there will probably be at least a few more months of higher prices.
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 Intraday Market Update page.
