Emini weak buy setup ahead of June FOMC

Emini and Forex Trading Update:
Friday June 14, 2019

I will update again at the end of the day.

Pre-Open market analysis

Yesterday traded above Wednesday’s high and triggered a buy signal. However, Wednesday had a bear body and Tuesday was a big outside down day. This is a weak buy setup.

Furthermore, the 6 day rally was a parabolic wedge buy climax on the 60 minute chart. The odds therefore favor at least a small 2nd leg down.

Finally, next Wednesday’s FOMC meeting is unusually important. It will override everything that happens between now and then. Consequently, the Emini might be waiting until then before resuming up or reversing down.

After 4 mostly sideways days, the odds favor more trading range price action again today.

Overnight Emini Globex trading

The Emini is down 7 points in the Globex session. It has been sideways for 4 days with lots of trading range price action. Consequently, day traders will expect at least one swing up and one swing down again today.

Unless the Emini breaks above Tuesday’s sell signal bar high, the odds slightly favor at least a small 2nd leg down over the next few days. This is because there is a parabolic wedge buy climax on the 60 minute chart, and that usually leads to at least a couple legs sideways to 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. 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 has sold off for 3 days from a double top with the March 20 high. It has been in a bear channel for a year. Every reversal down led to a new low within a few weeks.

What is different this time is that an oo (consecutive outside bars) buy signal triggered last week. That typically has 2 legs up. Consequently, this pullback will probably form a higher low.

If it does, traders will wonder if a head and shoulders bottom will trigger. A higher low around the April 2 low and the May 27 high will have a 40% chance of a swing up if the bulls get a good buy signal bar. Furthermore, it would probably convert the yearlong bear channel into either a trading range or a bull trend.

Overnight EURUSD Forex trading

The EURUSD 5 minute Forex chart has been stair-stepping down in a bear channel for 3 days. It weakly breaks to the down side for a few hours and then enters a trading range for many hours.

On the 60 minute chart, there is now a wedge bear channel. That typically evolves into a trading range. Traders should therefore expect small legs up and down today.

Since all financial markets will probably not have big moves until after Wednesday’s FOMC report, day traders will look to scalp 10 – 20 pips up and down today.

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 formed a triangle for 5 hours and then rallied to a new high. It reversed down from just above yesterday’s high and closed exactly at the open of the week. This week’s candlestick is a perfect doji bar on the weekly chart, which is neutral.

This is the 5th consecutive day in a tight range. Many traders are waiting for Wednesday’s FOMC announcement. That will probably lead to either a reversal down or a move up to a new all-time 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.

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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.

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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.

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