Emini and Forex Trading Update:
Thursday April 25, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini formed a trading range day yesterday after Tuesday’s big bull breakout. Because it is a pause after a breakout, it is a High 1 bull flag buy signal bar for today. But the bear body makes it a weak buy signal bar.
When a breakout is big, the Emini often has to go sideways for several days before the bulls will buy again. They will probably get their test of the all-time high within the next week. Traders might be waiting for next Wednesday’s FOMC meeting.
The bears hope that Tuesday was a blow-off top. They see yesterday as a sell signal bar for today. However, when a breakout is as big as Tuesday was, the bears typically need a micro double top before they can get a reversal down. Consequently, there will probably be more buyers than sellers below yesterday’s low.
Overnight Emini Globex trading
The Emini is up 1 point in the Globex session. It is 24 points below the all-time high. That is an important resistance level and therefore a strong magnet.
The Emini is close enough so that it will probably be unable to escape the magnetic pull. Traders expect a test of that high within a week. There is therefore an increased chance of a big trend day up or down on any day over the next week.
Since the Emini has been in a tight trading range for a day and a half, the odds favor more sideways trading today. Traders might be waiting for next Wednesday’s FOMC meeting before testing the September high.
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 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 broke below the 5 month trading range yesterday. So far, today is a 2nd consecutive bear trend day. It today has a bear body on the daily chart, it will confirm the breakout.
That means the odds would favor a swing down to around measured move targets. The nearest one is 243 pips below the March 7 low of 1.1177. That low is the neck line of the February 28 and March 20 double top. The target would be 1.0944.
If the selloff continues below that target, the next one is based on the height of the 5 month trading range. Some computers will use the November 12 low and others will use the March 7 low. That means traders would look for about 350 pips below the March 7 low, or about 1.08.
Another reasonable target is based on the June and September double top. The neck line is the August 1.1301 low. The projection is 550 pips below that low, or around 1.0750.
What if the bulls get a strong bull trend reversal today? They would need several bull days to undo this bear breakout. The weekly chart has been in a bear channel for 10 months. It would take a rally above the January high to convert the channel into a trading range.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart sold off 40 pips overnight. However, the selloff lacked consecutive big bear trend bars. It therefore is not a strong bear trend. Bull day traders therefore will buy for scalps today. They would like a bull trend reversal day today to avoid a bear body.
But, the small bars and prominent tails are a sign of a lack of energy. There is no sense that the price is terribly wrong. That reduces the chance of a big move up or down. However, the lack of conviction means that today will probably not close on its low.
The bears will sell rallies. Their minimum goal is a bear body on the daily chart. The do not need the selloff to continue lower today. If the day closes around its current level, today would be a strong follow-through bar on the daily chart. That would increase the chance of lower prices over the next month or two.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Note: Al is traveling so no chart and End of Day summary for today.
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.
