Emini and Forex Trading Update:
Friday May 3, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini sold off sharply early yesterday, but reversed up from a parabolic wedge sell climax at the 20 day EMA. On the daily chart, it closed with a small bear body. It is therefore a weak buy signal bar for today.
By trading below Wednesday’s low, the Emini triggered a sell signal on the daily chart. There are consecutive outside bars late in a bull trend at resistance. That is a sell setup. The odds are that the Emini will be sideways to down for the next 2 – 3 weeks, even if it bounces for a few days. However, if the bulls can close today above Wednesday’s high, they will erase the sell setup.
Weekly chart is important on Fridays
Since today is Friday, the weekly chart is important. The bears want a bear bar. That means a close below the open of the week. If they can get the week to close on its low, it would be a stronger sell signal bar for next week.
The bulls would like another bull bar. However, a small bear body is not particularly bearish. If the bulls can get at least that, the odds of a strong selloff would be less. Ideally, they want the week to close at a new all-time high, but that is unlikely.
Overnight Emini Globex trading
The Emini is up 13 points in the Globex session. That is near yesterday’s high. Yesterday is a High 1 buy signal bar on the daily chart. The bulls will try to trigger the buy today by breaking above yesterday’s high.
However, yesterday was a bear doji, which is a weak buy signal bar. In addition, the Emini triggered a sell signal yesterday by trading below consecutive outside days. Therefore, there will probably be sellers above yesterday’s high. The odds are against a big bull trend day.
Since today is Friday, the weekly chart is important. The most significant magnet is the 2942.00 open of the week. If the week closes below the open, the candlestick on the weekly chart will have a bear body. That will increase the chance of next week trading below this week’s low. Furthermore, it will make a 2 – 3 week pullback more likely.
With the big 2 day selloff and the reversal up, there is confusion. Also, since a sell signal is in effect on the daily chart, the upside is probably not big today. As a result, the Emini will probably have at least one swing up and one swing down today. That has been the case for most days over the past month.
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 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 reversed down from the 20 day EMA 2 days ago. It has been in a bear channel for 10 months. The bears hope that this will lead to a new low.
However, the 4 day rally was strong enough so that the bulls will probably buy above last week’s low. Also, the rally retraced less of the most recent bear leg than prior bear rallies. Finally, most bear rallies have lasted at least a couple weeks. Consequently, there will probably be a higher low today or tomorrow.
But, unless the bulls break strongly above the March 20 major lower high, the bear channel is intact. Traders will continue to expect a series of lower highs and lows.
In addition, there are measured move targets below. The nearest is 1.0942, based on the February 28 and March 20 double top.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart sold off 40 pips overnight and 130 pips from Wednesday’s high. It just reversed up on this morning’s unemployment report. The bulls hope that this is the end of the selling and will look to buy dips. After 3 days of selling, the bears will continue to sell rallies.
On the weekly chart, this week so far mostly overlaps last week and it is a doji bar. That is neutral. The high of the week is probably too far above for the bulls to reach today. This is especially true since the selloff was in a tight bear channel on the 60 minute chart. They will be satisfied with the week closing above the open.
The reversal up 5 minutes ago is probably enough to prevent this week from falling below last week’s low. However, the bears would like the week to have a doji body.
It is reasonable to assume that both the bulls and bears will be fighting today over this week’s close. The nearest target is the 1.1147 open of the week. That might be a magnet all day.
After a sharp 4 day rally and strong 3 day selloff, there is uncertainty. That is a hallmark of a trading range. Today will probably be a trading range day. Both the bulls and bears will scalp unless there is a strong breakout up or down.
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 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 today rallied in a small pullback bull trend. The bulls are trying to undo yesterday’s sell signal on the daily chart. The signal is still in effect unless the Emini breaks above Wednesday’s high, which is also the all-time high.
If the Emini breaks above and then reverses down within a day or two, there will be an expanding triangle top on the 60 minute chart. Since the Emini typically stalls around a prior major high, the odds still favor a couple weeks of sideways to down trading whether or not there is a new high 1st.
Beginners should know that the micro Emini S&P contract begins trading Monday. It is 1/10th the size of the Emini.
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 Intraday Market Update page.
