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Emini at top of buy climax on last day of April

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Emini and Forex Trading Update:
Friday April 30, 2021

Pre-Open market analysis of daily chart

  • On the 5-minute chart yesterday, the Emini sold off from above Wednesday’s high to below its low. That made it an outside down day.
  • It then reversed back up to above Wednesday high, which made it an outside up day. Emini at top of buy climax.
  • The reversal up from the low was also a test of the open of the week, and the 60-minute EMA.
  • The Emini yesterday closed in the upper 3rd of the range, and at a new all-time high, which is bullish, despite the early selloff.
  • Yesterday was the 4th consecutive bear day, which is a sign that more bulls are starting to take profits.
  • The Emini should correct 10% this summer, and this might be the start.
  • However, until there is a clear, strong reversal down on the daily chart, the odds continue to favor at least slightly higher prices.
  • Picking tops in a strong bull trend is a losing approach, unless a trader can trade small, use wide stops, and scale in.
  • There still could be a couple more pullbacks and new highs, before the correction begins, but there probably is not much left to the current rally before there is a 10% pullback.
  • Since the buy climax is so extreme, there is a 40% chance that the correction will reach 20%.
  • The correction could last a couple months. Therefore, the Emini will probably soon transition into a trading range for the summer.
  • Today is the last day of the week, and of the month. The bulls want April to close on its high, and they want the week to close above the open.
  • If April closes within 10 points of the high, the Emini might gap up on Monday. There would then be a gap on the daily, weekly, and monthly charts.
  • If today closes below the open of the week, this week would be a minor sell signal bar on the weekly chart.

Overnight Emini Globex trading on 5-minute chart

  • Down 20 points in the Globex session. Today will therefore open around the open of the week.
  • Bears want the week to close below the open, so that this week will have a bear body.
  • 5 consecutive bull bars on the weekly chart is unusual, which increases the chance of a bear body this week.
  • Open of the week could be a magnet all day, and especially in the final hour.
  • Last day of the month, so increased chance of big move up or down in the final hour.
  • If the Emini is within 10 points of the open of the week after 11 am PT, it might get drawn to the open of the week. Then, traders will decide if this week will finally have a bear body.
  • Big Down, Big Up yesterday creates Big Confusion, which increases the chance of a trading range day today. Today might oscillate around the open of the week.
  • Bears hope that yesterday’s reversal up was simply a test of the early high of the day. They want a reversal back down today. The late reversal up would then be a double top on the high just after yesterday’s open.
  • Small chance of huge bear trend day. Yesterday’s low is the neckline of yesterday’s double top. The bears want a strong break below yesterday’s low, and then a 40-point measured move down, based on height of yesterday’s double top.
  • Most days for several weeks have had at least one swing up and one swing down. Day traders expect that again today.
  • If there is a series of strong trend bars in either direction in the 1st hour, then increased chance of strong trend day.

Yesterday’s Emini setups

Emini outside up after outside down with bull trend reversal. Emini top of buy climax.

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

EURUSD Forex daily chart

EURUSD Forex consecutive wedge tops should lead to 2 legs down
  • Yesterday was the 6th day in the past 8 days with a small body. This is a sign of a loss of momentum.
  • The Small Pullback Bull Trend is intact, but these doji bars increase the chance of a pullback for a couple weeks beginning soon.
  • There are consecutive micro wedges, which increase the chance of a pullback soon. It might be underway.
  • Wedge typically leads to a couple legs down. Yesterday could be the start of a 2-week pullback.
  • The bulls want the tight bull channel to continue to above the February 25 high, and then the January high.
  • The EURUSD has been in a trading range for 9 months. Trading ranges resist change.
  • This rally is therefore more likely a bull leg in that trading range, than a resumption of last year’s bull trend.
  • If so, the rally should soon stall, and the EURUSD should go sideways to down for a couple weeks.
  • Yesterday had a bear body but a big tail. It is a weak sell signal bar, especially since it is coming in a tight bull channel.
  • The EURUSD might have to go sideways for a few days before it can go down.
  • Today is the final day of April.
  • April totally reversed the March selloff on the monthly chart, and it broke slightly above the March high.
  • The bulls want April to close above the March high, which would slightly increase the chance of higher prices next week.
  • The overnight selloff make it more likely that April will close below the March high. That would increase the chance of May being sideways to down.

Overnight EURUSD Forex trading on 5-minute chart

  • By breaking below yesterday’s low overnight, the EURUSD triggered a sell signal for consecutive wedge tops.
  • Bulls are taking profits on the daily chart, and others are shorting, betting on a couple legs down over the next 2 weeks.
  • Bulls want today to close back above yesterday’s low. Today would then be a weak entry bar on the daily chart, and the bulls might then continue their Small Pullback Bull Trend.
  • Bears want today to close near the low of the day. That would increase the chance that the Small Pullback Bull Trend on the daily chart has ended, and a 2-week reversal down has begun.
  • The overnight selloff has been in a tight bear channel. Day traders have only been selling.
  • If the bears begin to take profits and the overnight bear trend evolves into a trading range, day traders will also begin to buy for scalps.
  • Most likely the overnight strong bear trend will transition into a weaker bear trend and possibly a trading range. But unless there is at least a 20-pip bounce, day traders will only sell.
  • If today transitions into a trading range, day traders will begin to buy for scalps.
  • There is a 20% chance that today will form a major trend reversal on the 5-minute chart, and it will close back up near the high.
  • At a minimum, the bulls will try to get today to close above yesterday’s low. That would increase the chance of the Emini going sideways, instead of down early next week.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

Emini trading range day

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. 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

  • Gap down and then sold off from a double top at the EMA.
  • 1st reversal up from below open of week was minor.
  • Then got higher low major trend reversal, but in triangle.
  • Today was a trading range day.
  • On the 5-minute chart, the Emini closed just above the open of the day.
  • The CME owns the Emini and it uses an algorithm to calculate the close on the daily and weekly charts. It is often different from that on the 5-minute chart. On the daily chart, the close was below the open of the day and the open of the week.
  • This week therefore is a sell signal bar on the weekly chart.
  • Because the weekly bull channel is tight, this is a minor sell signal. However, the extreme buy climax will probably soon lead to a 10% correction and possible a 2-month trading range.

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 opens at 6:30 am PT, and closes at 1:15 pm PT). You can read background information on the intraday market reports on the Market Update page.

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