Emini and Forex Trading Update:
Wednesday July 8, 2020
I will update again at the end of the day.
Pre-Open market analysis
Yesterday again failed around 3175 where it failed twice on Monday. There is now a micro double top on the daily chart for a failed breakout above the 3 week trading range. Yesterday is the sell signal bar.
But yesterday was the 1st pullback in a 5 day rally. Traders believe that yesterday is the start of a 1 – 3 day pullback and not a reversal down. The bears need big bear days to change the odds in their favor.
Overnight Emini Globex trading
The Emini is up 1 point in the Globex session. Because yesterday was a strong bear trend into the close, the bears will probably become exhausted early today. That means that they will take profits and wait for at least a couple hours before considering to sell aggressively again.
There is often some follow-through selling in the 1st hour after a sell climax day. However, there is a 75% chance of at least a couple hours of sideways to up trading that begins by the end of the 2nd hour. Consequently, day traders will expect at least one swing up and one swing down today. There is only a 25% chance of a 2nd consecutive big bear trend day.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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 (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.
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
The EURUSD Forex market on the daily chart today is holding above yesterday’s low and below its high. Today is therefore the 2nd consecutive inside bar. That is a Breakout Mode pattern. The month-long trading range is also a Breakout Mode pattern.
Because the past 9 closes are above the EMA and Monday broke above a small bear trend line, the pattern is currently slightly more bullish than bearish. But until there is a breakout, there is no breakout. The odds cannot be more than 55% for the bulls or bears until there is a clear breakout.While waiting for the breakout up or down, traders are looking for reversals every 2 – 3 days.
Even though the bulls are slightly stronger at the moment, one big bear day would shift the odds back in favor of the bears. They see Monday as forming a double top with June 29, and that double top is a lower high major trend reversal down from June 10.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market has been in a 30 pip range overnight and it has had many reversals. Day traders have been scalping. If today remains the 2nd inside day on the daily chart, there will probably be at least a small breakout tomorrow.
A breakout can come at any time, but there is no sign yet that it will come today. Day traders will continue to scalp up and down while they wait.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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 (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.
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.
End of day summary
After yesterday’s sell climax, some trading range price action was likely today. Today rallied, sold off, and rallied again from a higher low major trend reversal. It was a trading range day, but it closed near its high and that makes higher prices likely.
Today is a buy signal bar for tomorrow. The bulls see today as the end of a 2 day pullback from a 5 day rally. Today closed back at the open of the week. Since last week’s rally was strong, traders expect higher prices.
Stuck at last week’s high
It is important to note that this week has been oscillating around last week’s high. Last week was a buy signal bar on the weekly chart. This week triggered the buy signal. However, this week so far has failed to move strongly above last week’s high.
There are 2 trading days left in the week. The bulls want a big bull trend day on the weekly chart. That will make higher prices likely next week.
The bears are hoping that this week’s buy signal will fail. They want the week to close on its low to become a sell signal bar for next week. But at the moment, the bull case is stronger.
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 Market Update page.
