Emini outside down week at 2800 is sell signal bar
Intraday market update: Monday March 11, 2019

Emini outside down week at 2800 is sell signal bar

I will update again at the end of the day.

Pre-Open market analysis

Last week was an outside down week on the weekly chart. It turned down from the 2800 Big Round Number and the October-November-December triple top. The odds favor at least a 2 – 3 week pullback.

It was the 1st pullback in 10 weeks on the weekly chart. The bulls are finally getting an opportunity to buy below the low of the prior bar. Many will take that opportunity. That will reduce the chance of a big selloff lasting more than a few weeks.

Possible ioi Breakout Mode pattern

An inside bar often follows an outside bar. There is therefore an increased chance that this week will open within last week’s range and not break below last week’s low. That is especially true after Friday’s strong, late rally. Friday is a good by signal bar for today.

If this week is an inside bar on the weekly chart, there would be a ioi (inside-outside-inside) pattern. That is a breakout mode setup.

But, the 2 month buy climax reduces the chance of a big move up from here without more of a pullback. The strong momentum up on the weekly chart minimizes the chance of a big sell. Consequently, the Emini might simply go a little sideways to down for a couple of weeks. Then, the bulls will try again to get above the triple top.

Overnight Emini Globex trading

The Emini is up 7 points in the Globex session. It might therefore gap above Friday’s high. Friday’s late rally was strong enough to make traders believe that there will be at least some follow-through buying today or tomorrow.

Friday broke above the wedge bear channel on the 60 minute chart. That channel began on March 5 from just above 2800. When a wedge reverses, the rally typically tries to test the start of the channel. At that point, the chart usually enters a trading range and is again in Breakout Mode.

The wedge sell climax likely exhausted the bears. Also, that magnet is strong. Consequently, the Emini will probably try to work higher over the next few days.

Friday’s setups

Here are several reasonable stop entry setups from Friday. 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 broke below the 4 month trading range last week, but had a bull bar closing near its high on Friday. In addition, the bulls have a wedge bear channel. That is a bull flag. They hope that the selloff is just another failed breakout attempt.

But, the bull trend reversal bar on Friday had a prominent tail on top. It did not close on its high. In addition, is was not especially big compared to the 6 day selloff. Consequently, many bulls will want to see a micro double bottom this week before they will be willing to buy. That limits the upside today and tomorrow.

The bears need follow-through selling. Friday was not a 2nd consecutive big bear day closing on its low and below the November low. The bears therefore were not strong enough to create a consensus that a bear trend was underway.

Today will be a Low 1 bear flag sell signal bar for tomorrow. If today closes on its low, bears will sell below today’s how and try again to establish a successful breakout.

More likely, today will disappoint the bears and a small trading range will form this week. That means that there will be both a micro double bottom and a micro double top. That would give both the bulls and bears a credible setup. One side will win, and it will control the next leg for at least several days.

Brexit will probably be postponed

Trading ranges are notoriously successful at preventing successful breakouts. Markets have inertia and tend to continue to do what they have been doing. While the bear breakout slightly increases the chance of a bear trend, the bears need to do more. Since the final decision on Brexit will probably be postponed again, the breakout will probably have to wait at least several more weeks.

Overnight EURUSD Forex trading

The EURUSD 5 minute Forex chart has been in a 25 pip trading range for overnight. Most of the time, the range was only 10 – 15 pips. That makes it difficult even for scalpers to make month. Since the next few days will probably be sideways, day traders will look for reversals and 10 – 20 pip scalps.

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

Today gapped up and rallied in an extremely strong Bull Trend From The Open. The rally is unsustainable and therefore a climax. Consequently, there is a 75% chance that tomorrow will have at least 2 hours of sideways to down trading that starts by the end of the 2nd hour.

Today’s rally was a reversal up from a wedge bottom on the 60 minute chart. Friday was also a test of a gap on the daily chart. The 60 minute wedge bottom should lead to at least 2 legs up to above 2800. Traders will therefore look to buy a reversal up from a higher low. The odds favor higher prices, even if there is a pullback today or tomorrow.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

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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.

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