Emini outside up week after March sell climax

Emini and Forex Trading Update:
Friday March 27, 2020

I will update again at the end of the day.

Pre-Open market analysis

The Emini again yesterday traded above last week’s high, but it could not get far above it until late. It was in a trading range for most of the day, just above last week’s high and a little below the 2600 Big Round Number. It rallied to above 2600 in the final minutes. Both numbers might be magnets today.

The next major target is 2715. That is 20% down from the high. If the Emini gets back above it, the Emini will no longer be in a bear market. The bulls should get there and they might do it today.

This week is outside up (it traded below and above last week’s range) and today is Friday. The bulls want today to close above last week’s high. This week would then be a stronger buy signal bar for next week on the weekly chart.

Strong rally so now trading range

Because the selloff was so extreme, the bear rally could last for months. However, the Emini has probably evolved from a bear trend on the daily chart into a trading range, and not into a bull trend. It will probably be sideways for months. There might be a brief new low. The top of the range will probably be above 3000.

Can today be a huge bull or bear trend day? That is always possible, but I think it will be more like yesterday and have a lot of trading range price action. If so, it might get drawn to last week’s high in the final hour and then end the week a little bit above or below it.

Weekly support and resistance can be important at the end of a Friday

Today is Friday so weekly support and resistance can be important. This is especially true in the final hour. This week is an outside up candlestick on the weekly chart. If the bulls can get the week to close at least above last week’s high, they will have a better chance of higher prices next week. Consequently, last week’s high and yesterday’s high are both magnets today.

Yesterday’s low is also a magnet. On the Globex daily chart, today traded above yesterday’s high. The bears would like today to fall below yesterday’s low. Today would then be an outside down bar at the 20 day EMA. That would increase the chance of lower prices next week.

However, there is a bullish tendency at the end of the March quarter. The bulls will probably buy today’s pullback before Tuesday’s close when March ends.

Overnight Emini Globex trading

The Emini is down 60 points in the Globex session. The bulls hope that the overnight bear channel is simply a bull flag in a 3 day bull trend. It probably is, but the Emini could pull back more before trying again to reach the targets above.

It is back in yesterday’s 5 hour trading range. That is an area of agreement. The Emini will probably hold in that area today. If the Emini is within 50 points of last week’s high in the final hour, it will probably get drawn there and close near it.

It does not matter if it closes a little above or below. There would still likely be some follow-through buying early next week into the end of the quarter.

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 (see Online Course/BTC Daily Setups).

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.

If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.

EURUSD Forex market trading strategies

The daily chart of the EURUSD Forex market shows a strong reversal up from an expanding triangle bottom. The EURUSD is now in the sell zone, around the EMA and a 50% pullback to the middle of the triangle. Traders expect a brief pullback and then at least one more small leg up to around the March 16 sell climax high.

After several big reversals up and down, the market is back to neutral. It is in the middle of its 8 month trading range.

Weekly support and resistance not important today

Since today is Friday, there is an increased chance of a big move late in the session. The bulls want the week to close on the high. However, it is near enough so that this week is already a big bull bar on the weekly chart. That reduces the incentive for them to buy aggressively today.

For the bears, the weekly chart now has a prominent tail. Having it get a little bigger will not change anything for next week. Therefore, they too have little incentive to do anything to change the appearance of the weekly chart.

Overnight EURUSD Forex trading

The 5 minute chart of the EURUSD Forex market rallied to above yesterday’s high, but then reversed down. It is stalling in a resistance zone on the daily chart after a rally from a sell climax. That reduces the chance of a strong bull trend day today.

But after a strong rally for several days, this 1st reversal down will probably not get too far. That means the EURUSD will probably not fall much further today.

It has traded in a 40 pip range for the past 5 hours. Traders expect that to continue for the remainder of the day.

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 (see Online Course/BTC Daily Setups).

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.

If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.

End of day summary

After 3 big bull days, the Emini today rallied in a weak bull channel. It reversed down to just below last week’s high and the 60 minute EMA at the end of the day.

Today was an inside day. It is therefore both a buy signal bar and a sell signal bar for Monday. However, it is a doji bar and therefore it is a weak signal bar. There might be more buyers below and sellers above.

The Emini formed an outside up week on the weekly chart. It is therefore a buy signal bar on the weekly chart. But it closed below last week’s high and this week’s candlestick had a prominent tail above. It is therefore a weaker buy signal bar for next week.

It is important to note that there is often buying into the end of March. Portfolio managers want to own the best stocks when they report their quarterly holdings. Consequently, there is often window dressing buying at then end of March. This reduces the chance of a big selloff on Monday or Tuesday.

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 Market Update page.

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