Emini and Forex Trading Update:
Tuesday September 22, 2020
I will update again at the end of the day.
Pre-Open market analysis
The Emini gapped down on the weekly chart yesterday. It sold off to the 20 week EMA and reversed up. After 3 consecutive bear bars on the weekly chart, a bull bar is likely this week or next week.
September is now an outside down bar on the monthly chart. But there are 5 consecutive bull bars on the monthly chart. This reversal will probably be minor. That increases the chance that September will close back above the August low.
Yesterday’s reversal up was at 10% down from the high on the cash index, which is support. Yesterday closed on its high and it is therefore a buy signal bar for today on the daily chart.
All of these factors are good for the bulls over the next week. However, there was as streak of 9 consecutive bull days in August. The Emini typically falls to below the low of streaks like that. The bottom of the streak was the July 30 low of 3184.75. Consequently, traders will probably sell a 1 – 3 day rally, expecting a test of that low. The odds are that the Emini will reach 3000 – 3200 before it makes a new high.
Overnight Emini Globex trading
The Emini is up 5 points in the Globex session. Since yesterday was a buy signal bar on the daily chart at support in an oversold market, traders expect today to go above yesterday’s high and trigger the buy signal. A good buy signal bar at support in an oversold market increases the chance of a bull trend day today. It also increases the chance of a rally that could last a few days.
Day traders today expect some follow-through buying after yesterday’s late strong rally. Bull trend days usually make an early low of the day. With an increased chance of a bull trend day today, day traders will look to buy an early selloff today.
However, there are important targets below on the daily chart. Therefore, any rally might only last 1 – 3 days. There is a small chance that today will go above yesterday’s high and then trend down to below yesterday’s low, which would form an outside down bar.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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 a weak breakout below the neckline of a 5-week head and shoulders top. The bulls want a reversal up from the bottom of the 8-week trading range and then a test of the February 2018 high.
The EURUSD is in Breakout Mode. There is a 50% chance of a successful breakout and measured move up or down. But until there is a breakout, there is no breakout. Traders will continue to look for reversals every week or two.
While the EURUSD is now near the bottom of the 8-week range, the bulls need a strong bull reversal bar. Traders would then look for a leg up.
There is still room to the August 3 low at the bottom of the range. The lack of a reversal increases the chance that the EURUSD will have to test that low before the bulls can regain control.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market broke below yesterday’s low and again below the neckline of the 5-week head and shoulders top overnight. However, the bulls bought the breakout.
Today so far has been a small trading range day, like most days for several weeks. Day traders continue to look for reversals and 10 – 20 pip scalps.
The bears are hoping that today’s trading range will be a bear flag in the yesterday’s selloff. They want the EURUSD to test below the August 3 low.
The bulls see the overnight low as a lower low major trend reversal on the 5 minute chart.
There is no sign that the overnight range is about to breakout up or down. Therefore, day traders will continue to scalp until there is a breakout.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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
Yesterday was a buy signal bar on the daily chart. When today gapped above yesterday’s high, it triggered the buy signal.
On the 5 minute chart, the Emini entered a triangle for the 1st several hours today. The triangle was also a head and shoulders bottom bull flag. There was a bull breakout and a resumption of yesterday’s bull trend.
The next target on the daily chart is the 50-day MA at around 3330. The Emini should get there this week, maybe tomorrow. That was failed support and the bears hope it will now be resistance.
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.
Emini Sept 22nd: How is bar 6 a buy? It is a small bar following a very strong first leg down from a double top. On the Daily Setups it says “sell climax”, but I didn’t think that would apply to strong first(!) legs. What am I missing?
Hi, AL
I havn’t seen oversold or overbought concepts in your course, even books. And I think it’s not an accurate term, market looks like oversold in march but can go lower, looks like overbought in August but can go higher.
It’s a relative term. I tend to use “buy climax” and “sell climax” instead, and I always say that a climax can go much further than what seems reasonable. However, a climax eventually attracts profit-takers. Until it does, most traders bet that the trend will continue and only trade in the direction of the trend.