Emini and Forex Trading Update:
Tuesday November 26, 2019
I will update again at the end of the day.
Pre-Open market analysis
After a big gap up and strong bull trend on the open yesterday, the Emini entered a trading range. It broke above last week’s high and to a new all-time high.
But last week had a bear body on the weekly chart and there is a buy climax on the weekly chart. This rally will probably only last a week or two before the Emini pulls back 50 – 100 points.
However, the bull trend is strong. Until there is a clear top or a big reversal down, the odds continue to favor higher prices. Since this is a holiday week, the Emini will probably spend a lot of time in trading ranges.
Overnight Emini Globex trading
After a big rally early in the Globex session, the Emini reversed down and is unchanged. With last week being a bear doji bar on the weekly chart in a buy climax, its close will probably be a magnet this week. Also, the holiday week will likely result in a lot of trading range price action. This is true even if there is a strong trend for an hour or two like yesterday.
This has been a great year for the bulls. Many will be quick to take some profits before the end of the year. Also, the buy climaxes on the daily and weekly charts increase the chance of profit taking soon. Consequently, there is an increased chance of a couple big bear days within the next few weeks.
But the tops of the monthly and daily bull channels are not far above. The 8 week rally could end with a blow-off top. That increases the chance of a surprisingly big bull day as well.
However, despite the strong bull trend on the daily chart, most days have spent most of their time within trading ranges. Day traders will trade the breakouts up or down with they come, but they expect them to evolve into trading range within an hour or so.
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 daily chart of the EURUSD Forex market is in the middle of a 4 month trading range. There is now both a double top and a double bottom. The chart is therefore in Breakout Mode. That means that there is a 50% chance of a bull breakout and a 50% chance of a bear breakout of the 3 week long pattern. Furthermore, there is a 50% chance that the 1st breakout will fail.
Finally, since the chart has been in a trading range for 4 months, traders will start to buy near the bottom at around 1.09. In addition, they will sell near the top at around 1.12.
Even if there is a breakout of the 4 month range, it will probably not get very far. Every rally and selloff for 2 years has reversed within a few weeks. There is no sign that this price action is about to change.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market so far has a small range. In addition, it is within yesterday’s range and today therefore is a small inside day.
Yesterday is a buy signal bar for a double bottom with the November 14 low. But it was the 4th consecutive bear bar. That is a weak buy setup. Additionally, the November 14 low is a magnet and it is just a little below yesterday’s low. These factors limit the upside today.
However, a magnet is support. Also, the range over the past 2 days has been small. Traders therefore do not expect a big bear day either. Today will probably be another day for scalpers.
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 rallied to a new high on the open, but the rally was weak. There was then a trend reversal down. However, the bulls bought the test of the open and today closed near the high. That increases the chance of higher prices tomorrow.
There might be some end-of-the-month profit taking tomorrow and Friday. But, despite the buy climax on the daily chart, it is still in a Small Pullback Bull Trend. Traders will need to see a strong reversal down before they believe that a 100 point, 2 week pullback has begun.
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.
