Emini streak might reach 10 consecutive weeks up
I will update again at the end of the day.
Pre-Open market analysis
Today is the 1st day of March. January and February were strongly bullish. The bulls want the rally to continue throughout March.
Today is also the last day of the week. The 2808.00 open of the week is very important. The bulls have 9 consecutive bull bars on the weekly chart. I only found one instance of a streak of more than 9 in the 20+ years history of the Emini. Consequently, the bears will probably get a bear bar this week. That means a close below 2808.
When there is a key price like that at the end of the day, week, or month, the chart often hovers around it until the final 30 minutes. Traders then decide on whether the close will be above or below.
The bulls will buy below 2808, believing that the Emini will try to get there today. However, there will be many bears selling there.
Does the Emini have to get there today? No, but the bears want at least a micro double top with Monday’s high before they will look for a 2 – 3 week pullback. Therefore, the Emini will probably test this week’s open today and this week’s high next week.
Overnight Emini Globex trading
The Emini is up 15 points in the Globex session. It is just above the important 2800 Big Round Number and about 8 points below the open of the week. It is close enough to the open to make a test of 2808.00 likely today.
Today will open far above yesterday’s close. When there is a big gap up, there is an increased chance of a trend day. Furthermore, a bull trend is more likely than a bear trend.
However, a big gap up means that the open is far above the EMA. Most traders do not like to pay far above an average price. Consequently, the chart usually has to test close to the EMA at some point in the 1st hour.
Therefore, a big gap up usually leads to a trading range in the 1st hour. The bulls look for a double bottom or wedge bottom near the EMA. On the other hand, the bears want a double top or a wedge top and then a trend down.
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. 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 rallied in a wedge bull channel to the middle of its 4 month trading range. A wedge is a climax. The chart typically breaks below the bull trend line (not shown) below the wedge. It can do so by going sideways or by going down.
Because the February selloff was unusually strong, there will probably be a test down. It should start within a few days.
However, there is always a 40% chance of a bull breakout above a bear flag. If the bulls get one or two big bull bars closing above this week’s high, the rally will probably continue up to the top of the 4 month range.
The chart has been sideways for 4 days. Traders are deciding on the direction of the breakout. Trading ranges are more likely to continue than breakout. Therefore, this 4 day range will probably continue today. Traders will then decide next week on the direction of the breakout of the wedge.
There is no reason to have an opinion about the direction of the breakout of the 4 month trading range. The probability of a bull breakout is the same as for a bear breakout.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart reversed up from below yesterday’s low. It is back into the middle of the 4 day range.
While it has rallied for the past 6 hours, the rally has only been 40 pips. It is therefore just a bull leg in the 4 day tight trading range. Despite the 6 hour rally, day traders are not making more than 20 pips on a trade. Consequently, today will probably continue to be a scalping market.
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. 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 up, but reversed down from a test of the open of the week. During the selloff, I repeatedly said that it looked more like a leg in a trading range than in a bear trend. I mentioned how almost every bar in the 1st 2 hours had a tail below, and that the odds favored a reversal up.
The bulls got a midday reversal and once again tried to get back above the open of the week. However, it was too far above. While they got near their target, they could not get the close above the open of the week.
This week was the 1st bear bar in 10 weeks. It ended the streak of 9 consecutive bull bars. The odds favor 2 – 3 weeks of sideways to down trading. This is true even if next week trades briefly above this week’s high.
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.
