Emini and Forex Trading Update:
Monday April 29, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini rallied in a Small Pullback Bull Trend on Friday. This is within a month-long Small Pullback Bull Trend on the daily chart. While there might be profit-taking around the September all-time high, the odds are that the best the bears will get is a couple weeks of a pullback to around the March 21 high. That was the breakout point of the rally of the past 3 weeks.
Everyone is aware of the all-time high 2956.00 magnet just above. Even if there is profit-taking, the bulls will probably get closer before they take profits. In addition, a strong rally like this often ends with a blow-off top. The odds continue to favor higher prices.
It is important to note that the Emini might start to go sideways ahead of Wednesday’s FOMC announcement. That could lead to either a strong break above or reversal down. But, because the bull trend is so strong, the bulls will buy any 1 – 3 week selloff.
Overnight Emini Globex trading
The Emini is unchanged in the Globex session. After a big bull day on Friday, there is an increased chance of exhaustion. That typically results in a small day and a close around the open. But the all-time high magnet is only about 13 points above. The Emini could quickly get there any day this week.
Tomorrow is the last day of the month. Most bars on all time frames have at least a small conspicuous tail on the top and bottom. Currently, the April bar has no visible tail on the monthly chart. There is therefore an increased chance of a 10 – 20 point pullback by tomorrow’s close.
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 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 had consecutive closes below the 5 month trading range last week. That increases the chance of a swing down over the next month or two.
The chart has also been in a tight bear channel for 10 months. There have been many legs up and down lasting 1 – 3 weeks. There is no sign that this is about to change. Consequently, traders should not be surprised by a 2 week rally coming at any time. However, the odds continue to favor lower prices.
Friday was an outside up day, but it closed in its middle. While that is not good follow-through for the bears, it is also a only a weak attempt by the bulls at a failed breakout. The bulls will probably need at least a micro double bottom before they can get a 2 – 3 week bounce. They need a strong break above the March 20 high to convince traders that the 10 month bear channel might be ending.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has been in a 25 pip range overnight. The bars are small, the tails are prominent, and the bars mostly overlap adjacent bars. There is no energy, and this reduces the chance of a big move today. Traders might be waiting for the next catalyst, which is Wednesday’s FOMC announcement. Day traders have been scalping for the past 2 days.
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 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 continued Friday’s weak rally, but failed to break above the all-time high. It will probably succeed this week, either before or after Wednesday’s FOMC announcement. A test of an important high typically results in a week or two of sideways trading rather than an immediate strong breakout.
Today sold off into the close and closed around the low and open. It is therefore a sell signal bar on the daily chart. But, the bull channel on the daily chart is tight and today’s doji body means that this is a weak sell setup. The market will probably wait for Wednesday’s FOMC report before there is a big move up or down.
Also, with so many of the bars Friday and today being in tight trading ranges, tomorrow will probably be quiet as well.
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.
