Emini and Forex Trading Update:
Wednesday June 5, 2019
I will update again at the end of the day.
Pre-Open market analysis
I said over the weekend and on Monday that the Emini would probably rally this week. After 4 weeks in a tight bear channel with 4 legs down, the odds favored several days up.
Yesterday gapped up and formed a 2 day island bottom. The rally was a Small Pullback Bull Trend. The Emini will probably be sideways to up for at least another day or two. If it forms several bull days, then the rally could continue up to the all-time high.
However, the month-long bear channel it tight. Therefore it is more likely that the bears will get a test of Monday’s low and a closure of the February 11 gap before there is a new all-time high.
Overnight Emini Globex trading
The Emini is up 8 points in the Globex session. Today therefore might gap up again.
However, yesterday was a buy climax. There is therefore a 50% chance of some follow-through buying in the 1st 2 hours, but only a 25% chance of another strong bull trend. Additionally, there is a 75% chance of at least a couple hours of sideways to down trading beginning by the end of the 2nd hour.
Yesterday was strong enough to make higher prices likely for a few days. Therefore day traders will look to buy 1 – 3 hours selloffs.
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 broke above the month-long trading range this week. The bulls want today to close far above yesterday’s high. That would increase the chance of a continued rally up to the March 20 major lower high.
Every breakout up and down over the past year has reversed within a few weeks. Consequently, the bears expect this breakout to fail before it gets much above the May or April highs.
If the rally breaks above the March high, traders will conclude that the yearlong bear channel has ended. They will then believe that the chart had either evolved into a trading range or reversed into a bull trend.
Since a bear channel is a bull flag, the odds are that the bulls will get a break above the yearlong bear channel at some point this year.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart rallied sharply in the past 10 minutes and is at the high of the day. The rally is strong enough to make follow-through buying likely. As a result, traders will probably buy the 1st 20 – 30 pip selloff and bet on a 2nd leg up.
In addition, traders will expect a bull channel for the next couple of hours. Bulls will buy pullbacks.
The bears will not sell until there is at least a micro double top. Even then, unless they get a strong reversal down, it will be easier to make money as a bull day trader today. This increases the chance that the bulls will get a close near the high of the day. If so, today will close above the May high and increase the chance of higher prices tomorrow.
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
After an early selloff, the Emini formed a wedge bottom. This led to an opening reversal up from a test of the May 13 low. The day closed near the open and formed a doji bar on the daily chart.
The bulls want the week to close on its high. Furthermore, they would like it to close above last week’s high. This week would then be an outside up bar and a better buy signal bar on the weekly chart for next week.
Today was a trading range day after yesterday’s buy climax. It increases the chance of more trading range price action tomorrow. But, the odds favor at least slightly higher prices over the next few days after the 3 day rally.
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.
