Emini and Forex Trading Update:
Friday August 23, 2019
I will update again at the end of the day.
Pre-Open market analysis
Yesterday was an outside day and a doji day on the daily chart, which is neutral. The Emini is at the top of a 3 week trading range. But the momentum up on the daily chart is strong enough so that the rally might go at least a little above the trading range.
If the bulls get consecutive big bull bars closing near their highs, the rally will probably continue up to a new all-time high. If not, traders should expect a 2nd leg down to below the August low and 2800.
Today is Friday so weekly support and resistance can be important, especially in the final hour. The nearby targets are last week’s high, low, and open of the week. Even if the week forms a doji bar on the weekly chart, traders will fight over whether there will be a small bull or bear body.
Overnight Emini Globex trading
The Emini is down 12 points in the Globex session. Most of that loss came in the past hour. The Emini has been struggling to hold above 2900. Traders know that the Emini is at the top of a 3 week trading range and it is therefore in the sell zone. If the bulls continue to fail to break above last week’s high, traders will look for a selloff to the bottom of the range and below 2800.
Yesterday’s early selloff was strong enough for traders to expect at least a small 2nd leg sideways to down. Today will probably open around yesterday’s low. That would achieve the minimum goal.
The bears hope that yesterday was a spike in what will become a Spike and Channel bear trend over the next week. That means they see yesterday’s selloff as the 1st of at least 3 legs down.
But the bulls hope that today’s gap down will simply be a test of yesterday’s low. They will try for an early reversal up from a double bottom.
If today closes around 2900 or below, this will with be a Low 1 bear flag sell signal bar on the weekly chart. That is what the bears hope to achieve today.
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 is breaking below a small bear flag. But the bear flag is a tight trading range and most tight trading range breakouts soon reverse.
Furthermore, the breakout is near the bottom of a 5 month trading range and near the bottom of a yearlong bear channel. Every breakout attempt over the past year has reversed. Consequently, while there is no reversal yet, traders should expect a 2 – 3 week rally to begin within a couple weeks. It could come from above or below the August low. If there is a break below the August low, it will probably last for only 2 – 3 days before reversing up.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart broke below the 6 day tight trading range overnight, but reversed up to just below the bottom of the range. The overnight range is not big. Therefore, this is not a strong breakout.
Today is Friday so weekly support and resistance are important. Last week was a big bear bar and a reversal down. This week has been small. At a minimum, the bears want a bear body on the weekly chart to confirm last week’s selloff. Consequently, they would like the week to close below the 1.1090 open of the week.
In addition, they would like it to close below last week’s low of 1.1066. It is within a few pips of that right now. In addition, the range has only been 25 pips over the past 8 hours. Therefore, today will probably stay in a tight range around last week’s low. Traders have been scalping around it, buying below and selling above.
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 had a huge selloff on China trade war news. It then entered a bear channel. When a Bear Surprise is that big, it is major. It often affects the market for several days. The bears need follow-through selling on Monday. If they do not get it, there is a 40% chance that today will just be a bear trap in the 3 week trading range.
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.
