Emini and Forex Trading Update:
Monday August 17, 2020
I will update again at the end of the day.
Pre-Open market analysis
The Emini on Friday traded below Thursday’s low and found buyers. Friday is a High 1 buy signal bar for today. However, it is a doji bar in a 3 bar tight trading range, which is a weak buy setup. Despite that, traders expect the cash index to make a new all-time closing high this week.
Four of the past 6 weeks gapped up on the weekly chart. The Emini is within a couple points of last week’s high in the Globex session. It might again gap up on the weekly chart. But, small gaps usually close before the bar closes. That means by the end of the week. If there is a gap up and it is only a couple points, it will probably close today.
It is important to note that there were 9 consecutive bull days on the daily chart. That is climactic. Traders should expect a pullback to around 3,000 to begin by the end of the month. This is true even though the cash index will probably close at a new all-time high early this week.
The driving force is the cash market. It tested its all-time highest close several times last week but failed to make a new all-time highest close. The bulls will probably try again today. They should succeed this week.
But will today be a bull trend day? It might be. The Emini could rally for another week or two before the effect of the 9 consecutive bull bars takes hold.
Overnight Emini Globex trading
The Emini is up 15 points in the Globex session. This is within a few points of last week’s high. Today might gap up again on the weekly chart. Since small gaps usually close before the bar is complete, the gap should close by the end of the week.
A breakout above major support sometimes comes with a big bull trend day. Can today be a big bear day? Unlikely. The bulls will probably get a close in the cash market above the February all-time highest close. That means today will probably not be a big bear day. But, as I said, a selloff on the daily chart is likely to begin this month. It therefore could begin today. However, a new closing high in the cash index is more likely.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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 EURUSD Forex market on the daily chart has been in a trading range for several weeks after a buy climax. It has at least 2 legs sideways to down and it has lasted at least 10 days. This meets the minimum expectation of traders for a pullback after a buy climax. The bulls are now willing to buy again.
We will probably find out this week if the trading range is a bull flag or a top. Since it is in a bull trend, it is slightly more likely to be a bull flag. However, a horizontal trading range late in a bull trend usually is the Final Bull Flag. Consequently, if the bulls get their breakout, there will probably be a reversal down within a couple weeks. If so, traders will expect a bigger pullback. It could last a few weeks and test the June 10 high or the June 19 low.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market broke above Friday’s high today. This therefore triggered a High 1 bull flag buy signal. However, it is near the top of a 3 week trading range, which is a bad context for a trend.
The EURUSD overnight has been in a trading range around yesterday’s high. Day traders have been scalping for 10 pips.
This is the 5th day without a bear body on the daily chart. That makes a big bear day unlikely today. It also increases the chance of a big bull day. The bulls want a strong breakout above the 3 week range. There is a sightly increased chance of a bull breakout above the overnight range and then a trend day to above the August high.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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
The Emini gapped up and entered a trading range. The cash index’s range was at the February all-time highest close for several hours, but again closed just below. The cash index will probably try again tomorrow. But after the streak of 9 consecutive bull bars ended last week, traders should expect about a 10% correction to begin by the end of the month.
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 Market Update page.
Hi Al,
In regards to rolling over contract months for CL and UB. CL is on the 20th of this month. I see that it lands on a Thursday. When do you normally rollover? Is it the day of or do you wait until next week?
Also, UB bond futures contract ends Sep 21. If you were trading it, would you switch over that day?
Thanks
Just follow the volume. It will tell you when to switch.