Trading Update: Tuesday September 7, 2021
Emini pre-open market analysis
Emini daily chart
- Tight trading range for 5 days increases chance of more sideways trading despite Emini rally into Labor Day.
- Friday traded below Thursday’s low and was the 1st pullback in 6 days.
- The reversal down was from the August high and the measured move based on the height of the pandemic crash.
- Friday was a bull bar and therefore a High 1 buy signal bar for today.
- But it had a prominent tail on top and the Emini has been in a tight trading range for 5 days. This is a weak buy setup.
- Traders expect higher prices for at least another week.
- September will probably be the high of the year and it should have a bear body on the monthly chart.
- The Emini might be mostly sideway ahead of the September 22 FOMC announcement before the 2-month reversal begins. There might be a blow-off top to this 18-month rally.
Emini 5-minute chart and what to expect today
- Emini is down 2 points in the overnight Globex session.
- After 5 days in a tight trading range, there is an increased chance of another relatively small sideways day today.
- This is a Breakout Mode pattern in a buy climax. A big trend day in either direction can come at any time, but markets have inertia. They continue to do what they have been doing.
- If there is a series of strong trend bars up or down, the odds of a big trend day will go up.
Friday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Strong rally to a fraction of a pip above the July 30 high.
- The bulls want the rally to continue to above the June 25 lower high.
- Unless they get consecutive closes above the July 30 high, there should be a pullback over the next week. It could be sideways or down.
- Yesterday was a bear day and today so far is a bear day. If it remains a bear day, there will probably be a couple small legs down to below the August 13 high over the next couple of weeks.
- There have been 3 pushes up in the bull channel from the August 20 low. That is a parabolic wedge buy climax, and it often will attract profit taking. Increased chance of a pullback this week.
- The bears want a reversal down from a buy climax and a double top. They then want a breakout below the August 20 neckline of the double top and a measured move down.
- It is more likely that a reversal down will be minor and form a higher low at around a 50% pullback and the July 21 low.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Parabolic wedge sell climax on the open.
- Reversed up from just below 6-day tight trading range and exactly at last week’s low.
- Rally stalled at 60-minute EMA and evolved into upper trading range in trending trading range day.
- Every day in September has traded through the open of the month, which should remind traders that the open is important.
- There have never been 8 consecutive bull bars on the monthly Emini chart. September or October should be the high of the year, and there should then be a 15 to 20% pullback.
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 Time
When I mention time, it is USA Pacific Time. The Emini day session charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.
Hi Dr. Brooks,
I took the short below Bar 20 for a scalp profit, but I wasn’t very confident in my trade because 9 to 17 was tight with small pullbacks. Although the trade worked, I was unsure of myself because I was afraid of selling into a tight bull channel because possible buyers below. Can you help explain why I shouldn’t be afraid of taking shorts into the 9 to17 Bull Move?
Similarly, I took a long trade at Bar 67, which is stupid in hindsight because we’re reversing down from Bar 54 to 61 in a tight channel so probably sellers above. But I tried to justify the trade because the Bull Move from 9 to 17 was tight but a short into it worked. It’s confusing me because the first scenario, a tight channel is not respected, and the second scenario a tight channel is respected.
Sorry for the long post, thank you Dr. Brooks.
Is there any practical significance that today we didn’t have a breakout of the 18 Bar range? What does a day without a breakout of the 18 Bar range signify?
I would not worry about it. That is fairly common when there is a strong trend on the open and then a reversal. Most of those days do not break out of the 18-bar range.
Thanks for the answer.