Emini and Forex Trading Update:
Friday November 20, 2020
I will update again at the end of the day.
Pre-Open market analysis
The Emini collapsed on Wednesday but reversed up yesterday from just above the October 12 high. That is the breakout point for the rally 2 weeks ago. Yesterday is now a Breakout Test and a buy signal bar for today. The reversal up was strong enough so that today should trade above yesterday’s high, which would trigger the buy signal.
The bulls want today to close above the September high. That would increase the chance of higher prices next week.
However, the week so far is a small, inside bar on the weekly chart. That could limit the size of any trend up or down today.
The bears want this week to close below the October 12 high. But with the Emini reversing up yesterday from that support, the odds are against a big bear day today.
Most likely, today will trade above yesterday’s high and be sideways to up. The obvious magnet is the September high. If the Emini is within 20 points of it in the final hour, it will probably get drawn to it. Traders would then decide if the week should close above or below it.
Weekly support and resistance can be important on Fridays
Today is Friday so weekly support and resistance can be important, especially in the final hour. The week will probably remain an inside week.
The nearest magnets today are the midpoint of the week, the September high, and the current high and low of the week. With the midpoint of the week at the September high and yesterday’s close, and the EMA on the 60-minute chart, that is the strongest magnet. If the Emini is within 20 points of that area in the final hour, it will probably get drawn there.
Overnight Emini Globex trading
The Emini in the Globex session is trading around the close of yesterday’s day session. It will probably trade above yesterday’s high today, which would trigger a buy signal on the daily chart.
But it has been oscillating around the September high for 2 weeks and it is now at that high, and in the middle of the 2-week range. That increases the chance that today will try to end the week around the September high. It therefore reduces the chance of a strong trend day. If there is a trend up or down in the first half of the day, there is an increased chance of a reversal back to the September high in the middle of the day.
Yesterday reversed much of Wednesday’s selloff. That sell climax began at 3600. The top of a sell climax is a magnet when there is a reversal up. Therefore, there is an increased chance that the Emini will reach 3600 today.
Will it continue up to Wednesday’s high? It probably will not, given all of the magnets around the September high and how much trading range trading there has been this week.
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. 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.
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
The EURUSD Forex market on the daily chart has been sideways for 2 weeks in a triangle. This is after an expanding triangle. A triangle after an expanding triangle is a Diamond pattern. Since the chart has been in a trading range for 4 months, it is already in Breakout Mode. A Diamond pattern therefore does not change anything. Until there are consecutive closes above or below the 4-month range, traders will continue to take quick profits and look for reversals.
Today is Friday and this week will probably remain a doji candlestick and an inside bar on the weekly chart. A doji is neutral and an inside bar is another Breakout Mode pattern.
The bulls want the week to close above the open so that the week will have a bull body. That would slightly increase the chance of higher prices next week. The bears want a bear body, which would slightly increase the chance of lower prices next week.
Overnight EURUSD Forex trading
The 5-minute chart of the EURUSD Forex market has been in a trading range overnight. Furthermore, it has been in a trading range for 4 days. It is at the apex of a triangle on the daily chart. All of these factors increase the chance that today will remain a trading range day. Day traders are looking for reversals and scalping for 10 pips.
Any day can become a trend day, but given what is happening, the odds are that today will remain a trading range day. But if there is a series of strong trend bars in either direction, day traders will switch to swing trading.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
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.
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.
End of day summary
The Emini spent 5 hours in a tight trading range after a brief, early selloff, and the bulls were unable to reach the September high. They gave up in the final hour and the bears got trend resumption down.
However, the selloff began at noon, which is usually too early to last until the close when the day is a trading range day, like today. The bulls made another attempt to get back to the September high and failed. The Emini then closed on its low.
Today is a bear inside bar on the daily chart. It is therefore a sell signal bar. This week is a bear inside bar on the weekly chart, and it is a weekly sell signal bar as well.
With the week closing on the low, next week might gap down. That would trigger the daily and weekly sell signals. If there is early, strong selling on Monday, it could lead to several days down.
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 Market Update page.
