Emini and Forex Trading Update:
Wednesday April 10, 2019
I will update again at the end of the day.
Pre-Open market analysis
Monday was an outside up day. It got to within 1 tick of 2900, but then reversed to below Friday’s low. The 2 days created a micro double top on the daily chart. In addition, there is a nested wedge top on the daily chart.
The bears are hoping that this is the start of a 2 month pullback. However, they need to start to create bear bars to convince traders that they are in control. If they can form one big bear bar or several small bear bars over the next week, traders will begin to wonder if 2900 will be the high for the next 2 months.
Every pullback for 3 months has lasted only 1 – 2 days. The bulls are hoping that this is just another dip in its Small Pullback Bull trend. Because yesterday was a pullback in a bull trend, it is a buy signal bar.
But, its bear body makes it a weak buy setup. There might be more sellers than buyers above its high. This is especially true because the Emini has been stalling at 2900, which is 1 tick above the high of the week.
The bulls need a strong break above 2900 to convince traders that this rally will continue up to the all-time high without pulling back for a month or two 1st.
Overnight Emini Globex trading
The selloff from yesterday’s high never gave Buy The Close bulls a chance to exit without a loss. When that is the case, the bulls scale in lower, expecting a test back to that final high close. That final high close was at yesterday’s high. Consequently, that is a magnet for today. It is also a magnet because yesterday is a High 1 bull flag on the daily chart.
The Emini is up 3 points in the Globex session. It tested the highest close of yesterday’s day session 15 minutes ago. However, it will probably test it again in today’s day session.
Yesterday is a buy signal bar on the daily chart and the chart is in a bull trend. Today will probably go above yesterday’s high today. That would trigger a buy signal on the daily chart.
However, yesterday had a bear body, and 2900 is resistance above. Therefore, there will probably be sellers not too far above yesterday’s high. In addition, most days over the past 2 weeks have had swings up and down. That further reduces the chance of a big trend day today. Today will probably also have at least one swing up and one swing 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. 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 has rallied for 7 days from a higher low double bottom. The rally lacks consecutive big bull bars closing near their highs. It therefore is not strong. However, a reversal up from a spike and channel sell climax typically tests the top of the channel. That is the March 25 high, which is about 50 pips above today’s current high. This rally is so weak that it might test down first.
Yesterday was a doji bar at the EMA. Each of the past 5 days had tails on top. Day traders are selling rallies. This lack of conviction reduces the chance of the rally continuing much longer. Consequently, there will probably be a test back down within a few days. The 1st target for the bears is Monday’s buy climax low.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart reversed down 10 minutes ago from above yesterday’s high. On the 240 minute chart, the 7 day rally is a wedge. That is a buy climax. Traders will therefore expect a couple legs down on the 240 minute chart starting within a few days. It could be starting today.
Yesterday was a doji day, which is a one day trading range. So far, today is a doji day as well. Furthermore, it reversed up from a perfect double bottom test of yesterday’s low and down from above yesterday’s high. That is a type of outside down day. If it closes near the low, the EURUSD will probably test 1.12 over the next few days.
Because most of the trading over the past 2 weeks was mostly sideways in the US session, day traders expect to scalp up and down today. The selloff of the past 10 minutes will probably remain as the high of the day. day traders will sell rallies and look to buy reversals up from around yesterday’s low. But, the reversal down was strong enough so there is a slightly increased chance of a bear trend day.
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. 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 formed a small trading range day, but rallied into the close. Today triggered a High 1 buy signal by going above yesterday’s high. But, yesterday was a bear bar and therefore a weak buy signal bar. However, 2900 is a magnet above. The Emini will probably test above it this week.
There is a nested wedge on the daily chart. Since the Emini is at resistance, the bears have a better chance of a swing down. But, they need to create bear bars. Without more selling pressure, the odds continue to favor a test of the all-time high.
So far, this week has been small. The bears hope to keep it from being a big bull trend bar on the weekly chart. It would then be bad follow-through after 2 big bull bars.
If they can get the week to close on its low, it would be a sell signal bar for next week. There would be a 7 week wedge top and buy climax on the weekly chart. That would increase the chance of a 2 month pullback before a test of the all-time high.
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
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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.
