Emini and Forex Trading Update:
Tuesday September 29, 2020
I will update again at the end of the day.
Pre-Open market analysis
The Emini gapped up on the weekly chart and triggered a weak High 2 buy signal. It also triggered a wedge bull flag buy signal on the daily chart. Yesterday closed back above the 50-day MA. Traders expect the Emini to test the lower high just above 3400.
However, yesterday was a trending trading range day on the 5 minute chart at both the 20-day EMA and the 50-day SMA. It might go sideways for another day or two before traders decide if the rally will continue up to 3400 or form a lower high. At the moment, traders expect at least slightly higher prices.
Overnight Emini Globex trading
The Emini is down 4 points in the Globex session. With yesterday being mostly sideways, daytraders expect a lot of trading range price action again today.
Even though the 3-day rally should work its way up to the September 16 lower high at around 3400, there will probably be a 1 – 2-day pullback starting this week. The 3-day rally has not had much of a pullback on the 5 minute chart. The Emini is therefore short-term overbought. That increases the chance of a 1 or 2-day pullback this week. But it might wait until after tonight’s debate.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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
The EURUSD Forex market on the daily chart has broken below an 8-week trading range. But, it has turned up for a couple days. Traders are deciding if the 2-day rally is just a test of the bottom of the range, or a resumption of the bull trend.
After several consecutive closes below the range, it is slightly more likely that the breakout will have at least one more leg down. However, if the bulls get a couple closes above the September 9 low and the EMA, the EURUSD will probably be back in the range. Traders will expect a continuation of the range. However, if the bulls get one or two closes above the September 10 lower high, traders will conclude that the bull trend is resuming.
I mentioned last week that the breakout was weak. When a breakout is weak, there is typically a bounce back to the breakout point, which is happening now. This current bounce should continue up to the 20-day EMA and to the September 9 low within a week. Traders will probably buy the 1st 1 – 2 day pullback on the way up to the target.
Overnight EURUSD Forex trading
The 5-minute chart of the EURUSD Forex market has rallied in a weak bull channel overnight. Traders expect the 2-day rally to reach to above the September 9 low of 1.1753 within a few days.
They will buy the 1st 1 – 2-day pullback. Consequently, day traders are more eager to buy pullbacks than sell rallies. But they will sell rallies for scalps once there has been at least one 20-pip pullback.
Since most days over the past 2 months have had small ranges and there has been a lack of sustained trends, daytraders are mostly scalping. If there is a 30 to 50-pip breakout up or down, they will swing trade. But they know scalps are much more likely.
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. I do not want the lines to be distracting. If they are longer, I make them dotted. But, they have to be visible, so I make the shorter ones solid. 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
Today opened in yesterday’s trading range, but sold off to below yesterday’s low. The wedge bottom on the daily chart should lead to a couple legs up, but that means traders expected a 1 – 2 day pullback this week. Today is the start of the pullback.
The Emini got near the 20 bar EMA on the 60 minute chart today, but did not reach it. Many bulls would like to see the pullback reach that support and then reverse up before buying for a 2 – 3 day bounce.
Because of the uncertainty surrounding tonight’s debate, traders should be open to anything tomorrow. However, on the daily chart, it looks like the pullback should end in a day or two, and then the Emini should continue up to around 3400.
But, even if it does, traders expect the Emini to fall below the streak of 9 consecutive bull bars that ended in early August. The 3 day rally might last a little longer, but it should form a lower 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 Market Update page.
Emini 9/29:
7.00 Bull surprise bar looks like a 2nd-leg trap right below top of TR. Shouldn’t we wait here?
8.15 Is the first bull BO from a bear micro channel with ten consecutive bear bars. Don’t we expect it to fail?
8.40 The biggest bear bar in a trend that has been going on for 16 bars and right above support, so probably climactic end. Why sell?
Thank you a lot for doing this, by the way. I am not trying to nitpick. Just trying to become less confused and to finally stop losing money 😉
ES looks like it’s taking a hit right after the
Chris Wallace Show – I mean “debate”, ended!