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Emini at bull trend line and has 4 bear bars

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Trading Update: Wednesday September 15, 2021

Emini pre-open market analysis

Emini daily chart

  • Emini at bull trend line with yesterday the 4th consecutive big bear bar in the 2-week selloff. That is unusual, and it therefore today should form a bull bar.
  • The Emini will probably soon stop going down and begin to go sideways into next Wednesday’s FOMC announcement. That means it should soon go sideways to up for a few days.
  • It is just above the 50-day MA and it might have to fall a little further first. It could also test the August 19 higher low.
  • Most recent days had early selloffs. If there is an early selloff today, there will probably be a reversal back up and close above the open.
  • The Emini closed below the daily bull channel again yesterday. Traders are deciding if the Emini will finally break far below the channel and evolve into a trading range. A 2nd consecutive close below the channel would increase the chance of lower prices over the next few days.
  • The Emini should begin a 15% correction in September or October. It might have already begun.
  • There is a small chance of a collapse far below the bull trend line over the next 2 weeks. Next week’s FOMC report could be the catalyst.
  • While trends resist change, there are factors that I have discussed in the weekend blogs that are increasing the chance of the bull trend on the daily chart reversing down for a couple months.
  • There is now a 50% chance that the September 2 high will remain the high for the rest of the year.
  • The September 2 high was just slightly above the measured move based on the height of the pandemic crash.
  • Because of the unusual streak of bull bars on the monthly chart, there should be a couple consecutive bear bars starting this month or next.
  • That should result in at least a 15% correction before the end of the year.
  • The Emini should fall 15% before rallying 15%.

Emini 5-minute chart and what to expect today

  • Emini is up 5 points in the overnight Globex session.
  • Yesterday sold off in a Spike and Channel Bear Trend. There is therefore a 75% chance of a couple hours of sideways to up trading that begins by the end of the 2nd hour.
  • The channel typically ends up being a bear leg in what will become a trading range. That channel is 30 points tall.
  • If today rallies, it could take hours to get back to the start of the channel, just above 4450 and around the 60-minute EMA.
  • There is a 25% chance of a strong break below yesterday’s wedge bottom and then a 30-point measured move down.
  • The Emini has sold off relentlessly to the bottom of the daily and weekly channels. Also, it is just above the 50-day MA, which has been reliable support for over a year.
  • The Emini will probably bounce for several days starting today or tomorrow. It might test the 4500 Big Round Number before the FOMC meeting.
  • A bear trend should begin within a month. It might have already started. That increases the chance of a surprisingly big bear day in an oversold market.

Yesterday’s Emini setups

Emini bear trend from the open and wedge bottom. Emini at bull trend line.

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. These therefore are swing entries.

It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.

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 higher low major trend reversal but tight trading range
  • Yesterday triggered a High 2 bull flag buy signal, but Monday had a bear body and it followed a bear bar on Friday. Also, the bear channel from the September 3 high was tight. This was a weak buy setup.
  • There were sellers above Monday’s high, and yesterday closed back near the open. A doji bar is a weak entry bar.
  • A weak entry bar and a weak buy signal usually does not lead to a strong trend.
  • So far, today is a bull bar, but the EURUSD has been in a tight trading range for 6 days. Traders are deciding if the selloff from the September 3 high is a pullback from the August 20 rally or a resumption of the bear trend that began in May.
  • 6 of the past 8 days have had bear bodies, although most were small and had prominent tails. This is therefore not as bearish as it could be.
  • The late August rally was strong, and it began at the bottom of a yearlong trading range.
  • The 7-day selloff was weak, and it looks more like a pullback in a bull trend than a resumption of the bear trend.
  • The strong rally from support and the weak reversal down makes it more likely that the selloff will form a higher low. Traders should expect a test of the September 3 high.
  • But because the EURUSD is in the middle of a 4-month trading range, the probabilities cannot strongly favor the bulls or bears. The chart is only slightly more bullish than bearish. That could quickly change with a couple big bear days closing near their lows.
  • All financial markets might be sideways into next week’s FOMC announcement. It could lead to a strong move in either direction.

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

Emini triangle open the Small Pullback Bull Trend and Bull Micro Channel to measured move target

End of day summary

  • Major Bull Surprise on the open on the 5-minute chart so likely to affect rest of day and possible next several days.
  • After triangle, bulls got strong breakout.
  • 23-bar bull micro channel was the 2nd most extreme micro channel in 5 years. It was therefore a buy climax, and it led to profit taking and a trading range.
  • Bulls expected and got a new high of the day after the pullback.
  • Today was a buy climax so should have at least a couple hours of sideways to down trading that starts by the end of the 2nd hour tomorrow. Maybe a pullback to the 60-min EMA.
  • On the daily chart, yesterday was first time since pandemic crash with 4 consecutive bear bars. That made it unlikely today would be a 5th consecutive bear bar.
  • Today broke above yesterday’s high and formed a 2-bar reversal.
  • Today is a buy signal bar for a reversal up from the bottom of the bull channel and from just above the 50-day MA.
  • However, after 4 big bear days, the first reversal up might only last 2 to 3 days. The bulls might want a double bottom before trying for a new all-time high.
  • That means might go sideways into next Wednesday’s FOMC announcement.

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 charts begin at 6:30 am PT and end at 1:15 pm PT which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.

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