Emini and Forex Trading Update:
Friday August 16, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini was in a trading range for the 1st half of yesterday. The bears got a strong breakout below the double bottom, but the selloff reversed up from just above last week’s low. The bulls hope that the reversal up continues throughout the day today.
Remember that earlier this week the Emini went above last week’s high. I have been saying that it might trade below last week’s low. That would create an outside down bar on the weekly chart.
Whenever a selloff is about to go outside down, there is often a sharp reversal up from just above the low of the prior bar. This is true on any timeframe. Yesterday reversed up strongly from just above last week’s low. The bulls now want a double bottom on the daily chart with last week’s low.
With the overnight reversal up, the Emini will probably not form an outside down bar on the weekly chart. However, the open of the week is likely too far above for the bulls to get a close above the open. Their alternate goal is to have the week close above its midpoint.
Overnight Emini Globex trading
The Emini is up 25 points in the Globex session. Traders therefore expect a gap up. The Emini might also gap above the 60 minute EMA.
Yesterday was a bull reversal day on the daily chart. There is now a double bottom with last week’s low. But since yesterday was only a bear doji bar on the daily chart, it is a weak buy signal bar. That is a weak foundation upon which to build a rally that would be strong enough to undo this week’s selling. Traders expect any bounce over the next few days to be just another leg in the 2 week trading range.
Today will open far above last week’s low. The bears will likely give up their goal of creating an outside down week on the weekly chart. That loss on an incentive to sell reduces the chance of a big bear day.
The most significant thing that the bulls could do today is to get the week to close above its open. But that is likely too far up. Therefore, there is also a lack of incentive for the bulls as well.
With no compelling reason for a strong trend up or down, if there is a trend today, it will probably not be strong. But the daily ranges have been big. As a result, even if today is mostly sideways, day traders will be able to swing trade.
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 and Encyclopedia of Chart Patterns 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 has 4 big bear bars after a failed breakout above a bull flag. Traders now believe that the August rally was a bull trap. It formed a lower high double top with the July 19 high.
This selloff is strong enough so that traders will sell the 1st minor reversal up. Consequently, the bulls will probably need at least a micro double bottom before they can begin a leg up.
The chart has been in a weak bear channel for a year. Every strong leg up and down reversed after a few weeks. Traders will therefore look for a reversal up from around the August low. The reversal can come from either a higher low or after a break below the low.
Eventually the pattern of reversals will end. But there is only a 25% chance of a successful strong bear breakout below a bear channel. What typically happens is that the channel transitions into a trading range. At the moment, there is no sign that the bear channel is about to end.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has sold off 40 pips overnight. It has been in a weak bear channel for 4 hours. While the rallies are currently too small for the bulls to make money, the bear channel will probably transition into a trading range within a couple hours. At that point, bulls scalpers will begin to buy reversals up.
Since there is a bear channel, the bears will continue to sell. But the legs down are not big. Consequently, the bears are now looking to sell rallies for scalps and they are taking profits around the prior low.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
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. 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.
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.
End of day summary
The Emini gapped above yesterday’s high and the 60 minute EMA. Today was a Bull Trend From The Open. However, the Emini went sideways around Wednesday’s high for the final 5 hours.
This week was a doji bar on the weekly chart. That is a weak entry bar after last week’s buy signal bar. Traders should expect sideways to down trading for at least a couple more weeks. The Emini will probably have to fall below 2800 before the bull trend will resume.
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.
