Trading Update: Wednesday June 16, 2021
Emini pre-open market analysis
Emini daily chart
- Even though buy climaxes on weekly and monthly charts, no credible top, so odds favor higher prices. June FOMC report at 11am PT today.
- Tight bull channel on daily chart for 4 weeks, so traders continue to expect higher prices. They will continue to buy 1- to 3-day selloffs until there is a very strong reversal down.
- Yesterday’s high was below Monday’s all-time high, and yesterday’s low was above Monday’s low, so yesterday was an inside day. Both buy and sell signal bar.
- Sell signal bar for failed breakout above May 7 high, but tight bull channel for 4 weeks. Minor sell setup.
- High 1 buy signal bar but bear body. Minor buy setup.
Emini 5-minute chart and what to expect today
- Emini is up 1 point in the overnight Globex session.
- Yesterday formed a trading range around the open of the week, so that is a magnet.
- June FOMC report at 11 am PT today. Since more signs of inflation, more potential for a change in the Fed’s wording.
- This increases the chance of a big move after the report. It could be in either direction, and it also could reverse and form an opposite big move.
- Because of potential for big move after any 11 am PT FOMC report, day traders should exit positions ahead of report.
- Since there is usually a big move in both directions in 1st few minutes after report, day traders should wait at least 10 minutes after the report before resuming trading.
- Very little correlation between the moves before and after the report. Trade what happens after the report as if it is the start of a new day.
- Ahead of the report, be open to anything. Yesterday had a lot of trading range trading, as do most days. Day traders will expect reversals.
- If there is a series of strong trend bars, day traders will look for a trend, but they should exit ahead of report.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Wedge bull flag since May 28.
- Yesterday triggered wedge buy signal by going above Monday’s high.
- Breakout was small and yesterday closed around Monday’s high instead of far above it. This is a weak entry for the bulls.
- Traders are still deciding if 3-week selloff is a bull flag in the bull trend that began on May 13. The bears hope it is a trend reversal down.
- Nested trading ranges on daily, weekly, and monthly charts, so traders expect reversals.
- Trading ranges tend to break below support, and above resistance before reversing.
- This selloff might need to fall below the May 13 low, before the bulls will buy again.
EURUSD Forex trading on 5-minute chart
- Small trading range so far today. Day traders are scalping in both directions.
- There is the June FOMC report at 11 am PT today. Since it can result in a big move in all financial markets, day traders should exit ahead of the report.
- There is usually a quick move up and down after the report. Day traders should wait at least 10 minutes before resuming trading.
- They should be open to anything, which means a strong trend in either direction, as well as a reversal.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Today had an FOMC announcement at 11 a.m. PT.
- Ahead of the FOMC announcement, there was a triangle and trading range open. A small bear breakout failed and then a bull breakout also failed.
- The bears got a successful bear breakout and a measured move down to below yesterday’s low. It was also a test of the May 7 high, which is the breakout point on the daily chart. Additionally, it was a test of the open of the month.
- After the FOMC announcement, the Emini formed a Major Bear Surprise Bar.
- However, It then rallied from a double bottom to above the top of the bear bar. That erased most of the bearishness of the big bear bar.
- The selloff fell below last week’s low so this week is now an outside down bar on the weekly chart.
- The selloff also broke below the May 7 high and the open of the month.
- The reversal back up went above both of those key prices, but today closed slightly below both.
- Today is a High 1 buy signal bar on the daily chart, but it has a bear body and the Emini has been in a tight trading range for a couple weeks. This is a weak buy setup.
- The bears want this to be the start of a correction, but most reversals fail. Therefore, the bears need strong follow-through selling before traders will look for lower prices on the daily chart.
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.