Trading Update: Friday September 3, 2021
Emini pre-open market analysis
Emini daily chart
- Although yesterday made another new high and it was the 6th consecutive day without a pullback, it was the 3rd consecutive bear bar ahead of today’s unemployment report.
- There should be a pullback either today or early next week.
- Yesterday is a sell signal ahead of Labor Day holiday at top of the bull channel on daily chart and at the 4,537.00 measured move target (based on the height of the pandemic crash). It is a doji bar in a strong trend so probably buyers not far below.
- The bull trend has been very strong, and therefore traders expect all resistance to fail. Traders will continue to buy every 1- to 3-day pullback until one is so big that traders will conclude that a correction is underway.
- This weekend is a 3-day holiday weekend. There is often some euphoria ahead of holidays, and the market tends to rally through September 5. There is therefore a slightly increased chance of a bull trend day or a rally at the end of the day.
- Today’s unemployment report and the 3-day weekend are catalysts that create uncertainty and could lead to a strong trend day in either direction.
- However, after 4 days with a lot of trading range trading, traders will expect more today unless there is a Trend From The Open.
Emini 5-minute chart and what to expect today
- Emini is up 3 points in the overnight Globex session, after a 20-point swing after unemployment report. The market is currently moving fast. There have been several big reversals. That increases the chance of an early trading range.
- The big range increases the chance of at least one swing trade today. It also increases the chance of a big trend day. It can be in either direction.
- So far, the Emini rallied, sold off, and bounced to retrace 50% of the selloff.
- Traders see the bounce as a pullback from the selloff from the Globex high. That makes sideways to down trading likely. The size of the selloff is enough to so that traders expect today will not get above the Globex high.
- As I said above, the Emini is in a strong bull trend, but overbought and it is starting to form bear bars on the daily chart. That increases the chance of a pullback for 1 to 3 days. Today could be the start.
- I have been saying that September will probably be the high for the year. Is this the start? There have been many other attempts to get a trend reversal on the daily chart and each failed. It is a low probability bet to say that this is the final high.
Yesterday’s Emini 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. 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
- Strong rally from the August 20 low.
- 10 bars in tight bull channel means strong bulls, but should get pullback within next few days from around July 30 high or June 25 high.
- Today broke above the July 30 high by a fraction of a pip and then reversed down. The bar could look different at the end of the day, but it is now a bear reversal bar, and there is a wedge rally to a double top. The rally has had 3 legs in a tight bull channel. It is therefore a parabolic wedge, which often attracts profit taking.
- Bears want double top with July 30 high and then a break below the August low, which is the neckline of the double top.
- A reversal down would more likely be a pullback from the 2-week rally than a resumption of the bear trend.
- After a complex bottom, traders will expect a 2nd leg sideways to up. They therefore will buy the 1st 3- to 5-day pullback, expecting a higher low.
- It would also be the right shoulder of a head and shoulders bottom where the July 25 low as the left shoulder.
Summary of today’s S&P Emini futures price action and what to expect Tuesday
End of day summary
- Consecutive big bull bars on the open and then trading range so Breakout Mode.
- Rallied in bull channel, but most of the bars were in tight trading ranges.
- Also was Bull Trending Trading Range Day.
- 1st pullback on daily chart in 6 days, but 5-bar tight trading range.
- Triggered sell signal by falling below yesterday’s low, but yesterday was a weak sell signal bar and today was not a big bear day closing near its low.
- Today is High 1 buy signal bar, but tail on top and 5-day tight trading range.
- Odds still favor higher prices, even if more pullback early next week.
- Remember, the high of the year should come in September.
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.
