Emini and Forex Trading Update:
Thursday July 2, 2020
I will update again at the end of the day.
Pre-Open market analysis
Yesterday was a bull trending trading range day after 2 strong bull days. Although it closed in the middle of the day’s range, it was still a third consecutive bull trend day. That increases the chance of higher prices.
This morning’s unemployment report is a potential catalyst for a big surprise up or down today. The initial move after the report was up, but there can always be a reversal of any strong move after a report.
Today is the final trading day of the week because of the holiday tomorrow. Today will probably go above last week’s high. This week would then be an outside up week on the weekly chart. That would increase the chance of higher prices next week.
What happens if the week closes on its low? That is very unlikely with a strong 1st 3 days. But if it did, it would increase the chance that the Emini has begun a correction down to the middle of the 2 1/2 year trading range.
Traders need to be open to anything today. If there is a trend, up is more likely after this week’s rally.
Overnight Emini Globex trading
The Emini is up 38 points in the Globex session just after the unemployment report. Traders see that the week has been bullish and that the initial move after the report was bullish. However, they know that there is still a 30% chance that the Emini will reverse down into a bear trend day after a big move up on a report.
This week reversed up from below last week’s low. It is now trading just above last week’s high. Consequently, this week will probably be an outside up week on the day session weekly chart. Since it is occurring in a bull trend on the weekly chart, it increases the chance of at least slightly higher prices next week.
There is no strong incentive for the bulls to rally far from here today. They are already making a strong statement by forming an outside up week. All they would like is for the week to close above last week’s high. The Emini could do that by simply being in a trading range today.
But because the week has been strongly up, there is an increased chance of a bull trend day today. Can today rally to above the June high? Since that is more than 70 points above the current price, it is probably too far above. However, the Emini will probably get there at some point in July.
EURUSD Forex market trading strategies
The EURUSD Forex market on the daily chart has been sideways for a month after a strong rally into June 10. The trading range has higher lows and lower highs and it is therefore a triangle.
Today is the 5th day without a bear body. Therefore, the EURUSD is slightly more bullish. But as long as it is still in the trading range, the probability cannot be more than 55% for either a bull or bear breakout.
Traders expect a measured move up or down once there is a successful breakout. Since the trading range is about 250 pips, a bull breakout could go above the March high. Traders would then conclude that the EURUSD’s 2 year bear trend was over.
If there is a downside measured move, the selloff could simply be a test of the April/May trading range. There is often a pullback to the breakout point after a strong breakout.
The bears need a break below the March low before traders will conclude that the 2 year bear trend is resuming. The EURUSD has been sideways for almost a year, even though the sideways move was also within the 2 year bear trend.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market rallied overnight from yesterday’s close. However, it has been sideways for 5 hours. Also, it is still below the June 23 lower high.
While the 2 day rally is bullish, it has not been especially strong. Traders see it as just another brief leg in the month-long trading range.
Day traders need to see several consecutive bull bars and big bull bars before concluding that today is going to rally much from where it has been for 5 hours.
Since reversals have been coming every couple of days, there is an increased chance of a reversal down today.
Because of the 5 hour trading range, day traders have been buying and selling for 10 pip scalps. Unless there is a strong breakout up or down, they will continue to scalp for the remainder of the day.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
The Emini sold off after a big gap up today. It rallied for a few hours from a wedge bottom that formed just above yesterday’s high. There was then trend resumption down into the close.
Today had a bear body on the daily chart. It is a sell signal bar for Monday. Traders see today as a failed breakout above the June 24 lower high. However, it did not close on its low and this week was strong. Therefore if Monday trades below today’s low to trigger the sell signal, the selloff will probably only last for a day or two. Traders expect higher prices next week.
Today traded above last week’s high after the Emini traded below last week’s low earlier in the week. This week is an outside up week in a bull trend on the weekly chart. That increases the chance of higher prices 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.
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.
Hi Al, since market is in TTR for around 20 bars, can you please explain what is the rationale buying above bar 49 or 50?
Always In Long, about 10 consecutive closes above the EMA, betting on resumption up.
Thanks Al and Richard. I didn’t pay much attention to the # of bars closes above EMA, that is great point. By the way, in scenarios like this, as a general rule, how many consecutive bars closes above EMA should draw a trader’s attention?
Here is Al’s bar-by-bar analysis for bars 49 and 51 from his Daily Update on BrooksPriceAction.com.
Low probability buys, and most traders should wait, but still Always in Long.
Hope that helps.
49 – II(Consecutive inside bars, Breakout Mode, so both buy and sell signal), AIL(Always In Long), but top of TTR(Tight Trading Range, limit order market, bad for scalping with stop orders. Most traders should wait.) so LRP(Lower Probability).
51 – Small BO(Breakout) above 30 top of TTR(Tight Trading Range, limit order market, bad for scalping with stop orders. Most traders should wait.), AIL(Always In Long) 23, BL(Bull or Bulls) need FT(Follow Through) for test HLW(High of Last Week). BR(Bear or Bears) want F(Fail, Failure, Failed) BO(Breakout) and big L2(Two legged PullBack in a bear move) 30.
Hi BTC Admin, how can we get this bar by bar analysis..
Simply register for free on Al’s other site at BrooksPriceAction.com and you will find the Daily Updates in the forum.
Al does this analysis each trading room day, about 15 days a month. It is done live while you are in the room.
ahh.. alright thank you very much..