Emini and Forex Trading Update:
Tuesday August 27, 2019
I will update again at the end of the day.
Pre-Open market analysis
Yesterday was a bull inside day on the daily chart. It is therefore a buy signal bar for today. The bulls hope that Friday was a bear trap and that June/July bull trend is resuming.
But unless the bulls get consecutive closes above the top of the 4 week trading range, traders will continue to expect a break below 2800. However, the odds still favor a new high this year.
On the 5 minute chart, Friday was a Spike and Channel bear trend. That usually transitions into a trading range, which happened yesterday. There is still room to the 2890 start of Friday’s bear channel, which is a magnet just above yesterday’s high.
Overnight Emini Globex trading
The Emini is up 9 points in the Globex session. It therefore might gap above yesterday’s high and the 60 minute EMA. That would trigger a buy signal on the daily chart. Furthermore, it would erase Friday’s bearishness. Friday would then be simply a bear trap within a trading range.
But the Emini is in the middle of a month-long trading range. It has reversed every few days. In a trading range, traders expect buy and sell signals to not have much follow-through. Consequently, the bulls will start to take profits and the bears will begin to sell as any rally gets near the 2940 top of the range.
Will today become a big bull trend day? When a market starts a day in the middle of a trading range, the odds of a big trend are less. The middle of the range is a magnet. Traders tend to sell higher and buy lower. Therefore, the odds favor more trading range price action 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 had a big bear bar yesterday after a bigger bull bar Friday. This is a common pattern. Traders wonder if yesterday is just a pullback from Friday’s rally or a reversal of the rally.
For the bears, it is a lower high at the EMA in a bear channel. Yesterday is therefore a Low 1 bear flag.
The bulls, however, believe there will be more buyers than sellers below yesterday’s low. They therefore expect today to become a buy signal bar for tomorrow.
After 7 sideways days, traders think that the daily chart is still in Breakout Mode. The believe that there is an equal chance of a bull or bear breakout.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has been in a 20 pip range overnight. Furthermore, it is within yesterday’s range. It therefore did not yet go below yesterday’s low to trigger the sell signal on the daily chart. But even if it does, the odds are against a big move since the price the EURUSD in the middle of a 7 day tight trading range.
At the moment, the day’s range has been so small that it is even difficult to make a 10 pip scalp. If today does trade below yesterday’s low, it will trigger a sell signal on the daily chart. But with so little energy overnight and for many days, there will probably be more buyers than sellers below yesterday’s low. Today will probably not go very far 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 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 gapped above yesterday’s high and triggered a minor buy signal on the open. It then sold off in a Small Pullback Bear trend for 4 hours. The bulls got a reversal up from a High 4 bottom, and the day evolved into a trading range.
Because it was a bear bar on the daily chart, today is a sell signal bar for tomorrow. But stop entry setups in the middle of a 4 week trading range are low probability bets. Just look at today’s buy signal.
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.
