Emini and Forex Trading Update:
Thursday April 30, 2020
I will update again at the end of the day.
Pre-Open market analysis
I have been saying that the Emini probably had to test the weekly EMA before there would be a 2 – 3 week pullback. The 7 week bull micro channel is extreme and it is coming after a big bear trend. There is now a wedge rally on the 60 minute chart nested within the wedge rally on the daily chart. But, there is no reversal yet.
Traders should expect the rally to be just another leg in the 2 1/2 year trading range. That means there should soon be a bear leg. The context is good for the bear leg to begin within the next few weeks.
I said over the weekend that this week might rally and then reverse. That would create a doji bar on the weekly chart. A doji bar is common after a High 1 where the buy signal bar was also a doji. This increases the chance of a reversal down this week or next. However, there is no sign of a reversal at the moment. Furthermore, the open of the week is probably too far below for a selloff today to get there.
The bull channel has been tight. This is a strong bull trend. It will probably reach the March 3 lower high at some point this year. Traders currently think that there will be a pullback before the bulls get their target.
April erased the March crash
Today is the last day of April. April is currently a big bull bar on the monthly chart. Yesterday got back to the February close. April therefore totally erased March’s collapse.
The bulls would like the month to close on its high. It would then be a good buy signal bar for May. It would increase the chance of higher prices in May. That February close could be a magnet today, especially in the final hour.
However, April follows 2 big bear bars on the monthly chart. Therefore, there will probably be sellers above the April high and below the all-time high of February. The 2 1/2 year trading range will probably continue for the rest of the year.
Overnight Emini Globex trading
The Emini is down 13 points in the Globex session. Yesterday was sideways for 4 hours and today will open within that range. That increases the chance of more trading range price action today.
The most important price for today is the February close. It could be a magnet all day. If the Emini is within 20 points of it in the last hour, it might get drawn to it.
The Emini on the monthly chart currently has a big bull bar closing on its high. Most bars on the monthly chart have at least noticeable tails on top and bottom. That increases the chance that today will close at least 20 points below the high of the month.
The high currently is yesterday’s high. Today could make a new high. But even if it does, there is an increased chance of a late selloff and the month closing 20 or more points below the high.
EURUSD Forex market trading strategies
The EURUSD Forex market on the daily chart has been in a tight trading range for 2 weeks. That range is within a month-long range, which is nested in an 8 month trading range.
It has been in Breakout Mode for several weeks. There have been small breakouts and reversals, but no big or sustained move up or down.
Traders believe that there is currently a 50% chance that the breakout will test the March 27 high and a 50% chance of a move to below the March 23 low. Traders are waiting for the breakout.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market has been sideways for 4 days. Day traders have been scalping.
Yesterday was a bull day closing near its high. It was an inside bar after last week’s reversal up. Even though it is a buy signal bar, there were more sellers than buyers above its high overnight.
The EURUSD has been in a 30 pip range for 6 hours. Day traders have been looking for 10 pip scalps as they wait for a strong breakout in either direction.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
After a gap down, there was a trading range open. A brief bear breakout led to a lower trading range. Today was a Bear Trending Trading Range Day.
Today was also the end of the month. April was a big bull inside bar in a 12 year bull trend. It is therefore a High 1 bull flag buy signal bar for May.
May might have to get above the April high to see what’s there. That would trigger the buy signal, but it comes after 2 huge bear bars on the monthly chart. There probably will be more sellers than buyers above its high. Traders expect the 2 1/2 year trading range to continue all year.
There is a nested wedge on the 60 minute and daily charts. However, about half of wedges in strong trends have at least a small new high before there is a reversal down.
A new high above the daily wedge would trigger the monthly buy signal. But, traders expect a 2 – 3 week pullback to begin within a couple weeks. As strong as the rally has been, there is probably not much left to it.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.