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Emini triggered sell signal for May 7 and June 1 double top

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Trading Update: Friday June 4, 2021

Emini pre-open market analysis

Emini daily chart

  • Yesterday broke below Tuesday’s low, giving an Emini triggered sell signal for the May 7/June 1 double top.
  • Since yesterday had a bull body, it was a weak entry bar. The bears need bear bars today and next week if the reversal down will be successful.
  • After 3 bear bars, yesterday was likely to be a bull bar, and it was.
  • Yesterday tested below last week’s low, and back below the May 14 neckline of the May 12/May 19 double bottom, but reversed up and formed a bull reversal bar.
  • Yesterday is a High 1 bull flag buy signal bar for today. The bulls want a breakout above the May 7/May 28 double top, which means a new all-time high.
  • Big tail on top of yesterday’s bar, and middle of 8-day tight trading range, so not strong buy setup.

Weekly support and resistance can be important on Friday

  • On the weekly chart, this week reversed down from above last week’s high, and then up from below last week’s low. This week is therefore an outside bar.
  • But this week’s range so far is small, and the weekly chart has been in a tight range for 8 weeks. Therefore, this week is not a reliable buy or sell signal bar.
  • Today is Friday and weekly support and resistance can be important.
  • If this week closes below last week’s low, especially far below, there would be an increased chance of lower prices next week.
  • If this week closes above last week’s high, which is unlikely, there will be an increased chance of higher prices next week.

Overnight Emini Globex trading on 5-minute chart

  • Up 18 points in Globex session.
  • Today will probably open in yesterday’s range.
  • Bulls want trend resumption up from yesterday’s early rally.
  • They want week to close above last week’s low, and above midpoint of this week.
  • Unlikely to rally back above last week’s high.
  • Bears want yesterday’s rally to be a bull trap in an early bear trend on the daily chart.
  • At a minimum, they want this week to close below last week’s low.
  • Day traders will begin the day expecting a continuation of yesterday’s trading range.
  • They will look for either trend resumption up or trend reversal down. If there is a series of strong trend bars in either direction, they will switch to swing trading.

Yesterday’s Emini setups

Emini bull trending trading range day resulting in Emini triggered sell signal.

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 2 legs down in trading range
  • Yesterday was big bear day, and reversal down from Tuesday’s lower high double top with the May 25 high.
  • It broke below the May 28 low, which is the neckline of the double top. It closed slightly below that low, which increases the chance of lower prices.
  • Bears hope this is the start of a selloff to the May 5 bottom of the 2-month trading range.
  • Big enough Bear Surprise Bar so that there should be at least a small 2nd leg sideways to down.
  • If the bears get a 2nd consecutive big bear bar today, traders will look for a measured move down to below 1.20.
  • Bulls want reversal up today or Monday for a wedge bull flag with the May 21 and May 28 lows.
  • It would also be a High 2 bottom and double bottom with the May 28 low.
  • This week is an outside down bar on the weekly chart. Bears want this week to close below last week’s low. That would increase chance of lower prices next week.
  • The bulls want the week to close above last week’s low. That would reduce the chance of lower prices next week.

Overnight EURUSD Forex trading on 5-minute chart

  • Traded just below yesterday’s low, but has been in small range.
  • Bulls want today to have bull body, so that it would be a buy signal bar Monday, for a High 2 bottom with the May 28 low. Moves up and down in trading ranges often reverse after a couple legs.
  • So far, today has a small range, and it is trading around last week’s low. Today is Friday so weekly support and resistance can be important.
  • So far, day traders are scalping long and short.
  • After several hours at yesterday’s low, and the bears unable to get a big bear day, today will probably not become a big bear day.
  • Bulls hope for an upside breakout of today’s range. If they get a series of strong bull bars, day traders will switch to swing trading, betting that today will become a strong buy signal bar for Monday.

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

Emini weak small pullback bull trend

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

  • Wedge rally for 2 hours and then minor reversal down to the EMA.
  • High 2 and 20 Gap Bar buy at EMA, and then a Small Pullback Bull Trend that tested open of week.
  • Close below open of week so small bear doji on weekly chart.
  • Close just below all-time high so possible gap up to new all-time high next week.
  • Bears want reversal down from double top with May 7 all-time high, but most reversals fail.

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.

  • Thanks for your report.
    I have one question about broad channel.
    As you said broad channel doesn’t happen in 5 min chart in just one day so we have to wait for two days or use higher time frames but how to identify broad channels in 1 hour chart or higher time frame?

    • I think of it in terms of bars and legs and not time frame.

      I will use a bull trend as an example to illustrate the things that I need to see to think the bull channel is broad.

      A bull channel means there is at least one higher low and one higher high. If there are more, then more traders will call the trend a channel.

      I will use the term “broad” if the average pullback in the channel retraces about two thirds of the last leg up, the average leg down has at least 10 to 20 bars and it subdivides into 2 or 3 smaller legs, and there are 50 or more bars where the chart looks more like a trading range than a bull trend, but the range has mostly higher highs and lows.

      If there is a channel that is tighter (legs with fewer bars) and more vertical, I simply call it a channel. If the pullbacks are only 1 to 5 bars, I call it a tight bull channel or a Small Pullback Bull Trend.

      The tighter a bull channel is, the better it is to only buy. The more it looks like a trading range, the more traders will both buy and sell, and take quicker profits.

  • thanks for you daily reports.
    i do swing trade (only long position) on stock using 30min charts thus my trade last few days to weeks. In order save my positions from overnight risk (sudden gap down ) is it necessary to purchase any derivative products like put to avoid those situations?
    Now i rely on the price action stops and everyday morning i place my SL or trailing SL.

    • The most common derivative is an option (put or call). That can be expensive, especially in situations when there is more risk.

      Some trades have greater risk, and it makes sense considering some way to reduce risk. When that happens, many traders will simply trade options instead of trading stocks and hedging with options.

      For example, late in a buy climax, there is an increased risk of a surprisingly big move down from panic profit taking. Traders expect higher prices and want to get long. Many will simply buy a call or a call spread instead of buying the stock and a put. The call spread approach reduces the risk of time decay when a market is moving quickly, which makes options expensive.

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