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Emini relentless rally to near top of bull channel

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Trading Update: Friday August 13, 2021

Emini pre-open market analysis

Emini daily chart

  • Another day, another new high. An Emini relentless rally.
  • Tight bull channel for 2 weeks after strong reversal up from July 19 low. No sign of top. Traders continue to expect higher prices. They will buy 1- to 3-day pullback.
  • Getting near top of bull channel based on the May 7 and July 14 highs, which is about 10 points above yesterday’s high. If bulls get breakout above it, the Emini will probably start to reverse back down within about 5 days. Most breakouts above bull channels fail before getting very far.

Emini 5-minute chart and what to expect today

  • Emini is up 5 points in the overnight Globex session.
  • If today gaps up, the gap will be small. Small gaps typically close in the 1st hour.
  • Yesterday was a buy climax. There is therefore a 75% chance of at least a couple hours of sideways to down trading today that begins by the end of the 2nd hour. There is a 50% chance of follow-through buying in the 1st hour.
  • Today is Friday so weekly support and resistance can be important, especially in the final hour.
  • The bulls want a bull body and for the week to close near the high. That would increase the chance of higher prices next week.
  • A close near the high of the week would also increase the chance of a gap up next week on the weekly chart.
  • The bears want the week to close below the open of the week. That would increase the chance that next week will trade below this week’s low. However, today would have to completely reverse yesterday’s strong rally, and that is unlikely.

Yesterday’s Emini setups

Emini parabolic wedge bottom and then Small pullback bull trend. A relentless rally.

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. Buyers of both 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. These therefore are swing entries.

It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.

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

EURUSD Forex daily chart

  • Today is start of follow-through buying after Wednesday’s small reversal up from double bottom with March low.
  • Today’s low is a higher low micro double bottom with August 11 low. Bulls have the minimum they need for a 3-week rally to July 30 lower high.
  • Today is Low 1 sell signal bar. Also, it is a micro double top bear flag with Wednesday’s high. If today remains a bull bar, it would be a weak sell signal bar. That means there would probably be more buyers than sellers below its low, and the market would more likely go sideways for a few days rather than down.
  • Bears want break below March low and then below November low, which is bottom of yearlong trading range.
  • Since most breakouts of trading ranges fail, there will probably be more buyers than sellers soon. That includes below the November low. The bulls are trying to begin the reversal up this week.

Today is Friday so weekly chart is important

  • Today is Friday so weekly support and resistance can be important. The bears want the week to close on its low.
  • The bulls would like it to close above the open of the week so that this week would be a buy signal bar on the weekly chart for a micro wedge bottom over the past 8 weeks, and a double bottom with the March Low.
  • The bigger the bull body, the more likely the EURUSD has begun a rally to the July and June highs.
  • If this week has a bear body and closes on the low, which is unlikely, traders will expect lower prices next week.
  • If this week closes in the middle of its range, traders will look for a sideways week next week.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

Emini trading range day

End of day summary

  • After yesterday’s buy climax, a couple hours of sideways to down trading was likely to begin in the 1st 2 hours. It began on the open and lasted all day.
  • There was a late bear breakout, but it failed, as was likely on a trading range day.
  • The bull trend on the daily chart is strong. Traders should expect a breakout above the top of the bull channel on the daily chart. Monday might gap up above this week’s high and the top of the bull channel.
  • Most breakouts fail within about 5 days. Therefore, if next week breaks above the bull channel, the Emini should then reverse down to at least the middle of the channel over the following couple weeks.
  • The bears want a bear bar on the monthly chart in August. If they get it, the Emini will probably begin a 15 to 20% correction.
  • Today closed just above the open.
  • A small bear bar is a low probability sell setup. There will probably be buyers not far below today’s low.

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 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.

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