Emini and Forex Trading Update:
Thursday October 31, 2019
I will update again at the end of the day.
Pre-Open market analysis
Yesterday sold off on the open and closed the gap above Friday’s high and last week’s high. The Emini was in a trading range day until the FOMC announcement.
After the 11 am PST report, the bulls rallied to a new high of the day. Furthermore, the rally went above Tuesday’s high. That means there are consecutive outside bars on the daily chart. Yesterday is therefore a buy signal bar for an oo bull flag. If today goes above yesterday’s high, it would trigger the buy signal. Traders would then expect sideways to up trading for several more days.
The bears want today to be a bear inside day. Today would then be an ioi (inside-outside-inside) sell signal bar for tomorrow. Traders would wonder if this week’s breakout to a new all-time high might fail.
Overnight Emini Globex trading
The Emini is down 5 points in the Globex session. Since yesterday was a buy climax day, there will probably be some profit-taking today. Traders expect at least a couple hours of sideways to down trading to begin by the end of the 2nd hour. It might begin on the open.
Today is the last day in October. October is now an outside up month. The bulls would like October to close above the September high. That would be a sign of strong bulls and increase the chance of higher prices next month. In addition, they would like the month to close above the July high as a further sign of buying pressure.
The Emini is now about 11 points above the July old all-time high. That former all-time high is close enough to be a magnet today. That increases the chance of at least a small bear trend day today.
Since the bulls have already accomplished their goals, they do not need another big bull day today. Therefore, today will probably not be a strong follow-through buying day, despite yesterday’s late rally.
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 has 4 bull bars, but only one is a big bull bar closing near its high. Furthermore, today so far is a small day and its high is near the October 21 high. This looks more like a test of that high rather than a resumption of a bull trend. Consequently, the rally will probably lead to another pullback from here, or from slightly above at the 13 month bear trend line.
The bears were expecting a 2nd leg up after the strong October rally. They want a double top with the October 21 high and then a resumption of the 21 month bear trend. But the 4 day rally has all bull bars. Also, there is room to the 13 month bull trend line magnet above. Therefore, the bears will probably need at least a couple bear bars before they can get a reversal down.
When the price action is not particularly strong for either the bulls or the bears, the chart typically has to go sideways for more bars. Traders expect sellers around the 13 month bear trend line and the October 21 high and buyers around the October 25th and 15th lows.
Today is the last day of October. October is an outside up month on the monthly chart. It will probably close above the September high. That would increase the chance of at least slightly higher prices in November.
Weekly chart forming High 1 bull flag buy signal bar
Tomorrow is Friday and therefore the price action today and tomorrow affects the appearance of the weekly chart. So far this week is a bull inside bar on the weekly chart after last week’s pullback.
If the bulls can get the week to close near its high, this week would be a good buy signal bar for next week. The 3 week rally in October on the weekly chart was strong enough to make at least slightly higher prices likely next week.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has had no follow-through buying so far today after yesterday’s strong rally. It has been in a 30 pip range and there have been several small reversals. Day traders have been scalping.
Traders are wondering if yesterday was a resumption of the bull trend or simply a buy vacuum test of resistance. They may need a few days to decide. This makes a small sideways day likely today.
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 sold off in a parabolic wedge sell climax on the open. It reversed up from below yesterday’s low and the bottom of a 3 day expanding triangle. For the rest of the day, it was sideways. There was some short covering at the end of the day. October closed above the September and July highs. That strength increases the chance of higher prices in November.
Tomorrow is Friday and the Emini is near the open of the week. The bears want tomorrow to close below the open. This week would then be a sell signal bar on the weekly chart for a failed breakout above the July all-time high. But after 3 bull bars on the weekly chart, a 1 – 2 week pullback is more likely than a bear trend.
With mostly sideways price action for 4 days and the Emini oscillating around the open of the week, tomorrow will probably continue the trading range. The open of the week will be a magnet, especially in the final hour.
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.
