Emini lower high but closed above 3000 Big Round Number

Emini and Forex Trading Update:
Thursday September 12, 2019

I will update again at the end of the day.

Pre-Open market analysis

Yesterday was a Small Pullback Bull trend. It broke above the 4 day tight trading range and closed above the 3,000 Big Round Number. The Emini will probably make a new high within a couple weeks and possibly today. The bears need a strong reversal down this week to turn the Emini back to neutral.

Since yesterday was a buy climax, there is a 75% chance of at least a couple hours of sideways to down trading today that begins by the end of the 2nd hour.

Overnight Emini Globex trading

The Emini is up 7 points in the Globex session. It pulled back from an overnight break above the August high. There is typically selling around a prior high, like the August high and the July all-time high. The bulls who bought around those highs are relieved to be able to exit around breakeven, and many sell out of their longs. Consequently, the Emini might go sideways for a day or two around the July all-time high.

Because yesterday was a buy climax, day traders expect some exhaustion. That means trading range trading. Exhausted bulls start to look to buy pullbacks instead of at the market. Once pullbacks begin, the bears sell reversals down for scalps.

Can today be a big trend day? The bulls are exhausted and the chart is near resistance. That reduces the chance of a big bull day. The bull channel yesterday was tight and that makes a strong bear day less likely. Today will probably have a lot of trading range price action.

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 and Encyclopedia of Chart Patterns 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 sold off for the past 2 days from a bear flag at the EMA in a bear channel. But yesterday’s bear bar had a prominent tail below. Also, today’s has a big tail above and the body is not exceptionally big. This is not yet a strong selloff and traders are wondering if there will be a 2nd leg up after last week’s bull trend reversal.

Whether or not there is a 2nd leg up, there is no sign that the yearlong bear channel is about to end. Traders continue to expect lower highs and lows. The best the bulls can probably do is to test the August lower highs.

Overnight EURUSD Forex trading

The EURUSD fell 100 pips in the past hour. It is now again testing the bottom of the yearlong bear channel. In addition, it is testing the September 3 buy signal bar high. Traders need to see follow-through selling over the next hour to know if this bear breakout is the start of a bear trend day or just a sell vacuum test of support.

The 5 minute chart has been sideways for 6 bars and the bars are small. The bears are hoping that this is a brief bear flag and that the chart will continue down in a bear trend for the rest of the day.

However, the bulls want the chart to stop going down. They then want relentless profit-taking today. That would create a bull channel on the 5 minute chart and reverse most of this morning’s selling.

Currently, there is a 50% chance of either outcome. Day traders need to see more bars. If there is either a channel up or down, they will swing trade. But if the 5 minute chart enters a trading range, they will scalp.

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 and Encyclopedia of Chart Patterns 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

The Emini had several legs up and down today and formed a trading range day. It got to within 8 points of the July all-time high. The odds favor a new high within a week. It might come tomorrow.

The bears see the 3 week rally as a wedge on the daily chart. Also, the ledge top on the weekly chart is a magnet below. But today had a bull body and it is therefore not a reliable sell signal bar. Consequently, the downside risk over the next few days is not great.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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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.

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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.

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