Emini and Forex Trading Update:
Monday July 15, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini has rallied for 6 weeks and it is at a new all-time high. Since the bull trend has 4 legs up and the channel is tight, the rally is a parabolic wedge buy climax. It is now near the top of the tight bull channel. Consequently, traders expect a 2 – 3 week reversal soon. However, there is no sell signal yet on the daily chart Therefore the odds favor at least slightly higher prices.
Furthermore, the Emini is getting near the top of the weekly expanding triangle top. But there is no top yet, and even a minor reversal will probably need at least a micro double top first.
Even when the bears finally get their reversal, it will probably be minor. The monthly chart is still on an oo buy signal. That makes sideways to up likely for at least a couple more months.
Overnight Emini Globex trading
I said on Friday that this week might gap up on the weekly chart because of Friday’s strong close. The Emini is up 10 points in the Globex session. Today therefore might have a small gap above Friday’s high, which was last week’s high. However, small gaps usually close in the 1st hour.
Friday was a Small Pullback Bull Trend. That is unsustainable and therefore climactic. As a result, there is a 75% chance of at least 2 hours of sideways to down trading beginning by the end of the 2nd hour.
If the Emini enters a trading range, the bears could then try to create a major trend reversal on the 5 minute chart. Also, the rally is near the top of the month-long tight bull channel. There will probably be at least a 1 – 2 day pullback this week. The odds of a strong selloff over the next few days are small.
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. 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 is in the middle of a 5 month trading range. There is therefore both a buy and a sell setup. The bulls have a double bottom higher low major trend reversal. However, the July 9 buy signal bar was weak, as has been the follow-through after the one strong bull day.
If today is a bear day, it will be a sell signal bar for tomorrow. Today will be a micro double top with Thursday’s high. Furthermore, the 3 day rally will be the right shoulder in a head and shoulders top bear flag. June 12 would be the left shoulder.
The bears want a strong break below the May 23 low. If they get it, traders will conclude that the yearlong bear channel is still in effect. However, the bulls bought every new low over the past year. Consequently, they will probably buy around the May low as well.
On the weekly chart, last week was a small buy signal bar. When a buy signal bar is small and the buy signal triggers, there is a 50% chance of a quick reversal down to below the low of the bar and then a 2nd reversal up. The weekly buy signal will trigger if this week goes above last week’s high. Unless the bulls get a strong rally above that high, traders will watch for a reversal down to below last week’s low.
Overnight EURUSD Forex trading
The EURUSD 5 minute Fores chart has been in a 20 pip range overnight. By going above Friday’s high, today triggered a minor buy signal on the daily chart. However, the rally so far has failed to trigger the weekly buy signal by going above last week’s high.
Today is the 3rd day in a tight trading range. There is no sign that today will be different.
Traders are deciding between a test of the May low or the June high. The chart might have to do both. If so, it will probably test down 1st. This is because the 3 day rally has been weak and it followed a 3 week tight bear channel. Therefore, many bulls want another test of the June low. In addition, the bulls had their best rally in over a year in June. They therefore will probably get at least one more leg up to test the March or January highs.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
I will post chart after the close.
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 gapped above last week’s high, but sold off on the open. The bear bar was big enough to dominate the rest of the day. After a spike and channel bear trend, the Emini entered a trading range.
Today had a bear body on the daily chart and the daily chart has a parabolic wedge buy climax. Traders see today as a sell signal bar for tomorrow. Since the bull channel is tight, the Emini will probably go sideways for a few days as it decides whether to pull back for 1 – 3 weeks.
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.
