Emini pullback at top of parabolic wedge buy climax
I will update again at the end of the day.
Pre-Open market analysis
Wednesday was a sell signal bar on the daily chart. When yesterday gapped below Wednesday’s low, the Emini triggered the sell signal. However, yesterday rallied and closed above its open. It is now a buy signal bar for today. Because it was a doji bar, it is a weak buy setup.
Since the weekly chart has 8 consecutive bull bars and that is rare, the chart is in a buy climax. The daily chart has a parabolic wedge buy climax. The odds favor at least a 2 – 3 week pullback starting within a week. Wednesday might have been the start.
However, the bull channel on the daily chart is tight. Many traders want a 2nd sell signal. Therefore, the bulls might get one more brief new high before the pullback begins. Since yesterday is a buy signal bar, there is an increased chance of a bull trend day today.
Most of the trading over the past 3 days has been within trading ranges. Consequently, today will probably have a lot of trading range price action as well. Traders are deciding whether the pullback has begun or if there will be one more brief new high 1st. Less likely, the rally will continue to above the October-November-December triple top without a pullback.
Overnight Emini Globex trading
The Emini is up 7 points in the Globex session. If today trades above yesterday’s high, it would trigger a buy signal on the daily chart.
But yesterday was a doji bar and therefore a weak setup. In addition, the daily chart is in a buy climax. Consequently, there will probably be more sellers than buyers above yesterday’s high. Therefore, today will probably not be a big bull day.
Since the past 2 days were dojis days, today, too, will probably be mostly sideways. In addition, the weekly chart has a bull bar. the weekly chart has been alternating bull and doji bars for 3 weeks. This week will probably close near its high and remain a bull bar.
There is not much incentive for the Emini to go far up or down today. However, next week will be a good candidate for the start of a 2 – 3 week pullback.
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. 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 weekly Forex chart so far has consecutive bear bars. If today closes near its low, it would increase the odds of a successful breakout below the 4 month range. Since the trading range is about 300 pips tall, the measured move target would be around 1.0970.
This week is not especially big. Therefore, the bears do not yet have a sense of urgency. However, if next week is also a bear bar closing near its low, the odds of a resumption of the 2018 bear trend will be 60%. This is especially true if next week is a big bear bar.
Overnight EURUSD Forex trading
The EURUSD daily chart had a buy signal bar yesterday. The bulls needed to break above yesterday’s high to trigger the micro double bottom buy signal. Instead, the daily chart today traded below yesterday’s low. So far, today is a big bear bar.
The bears do not need more than that today. But, they need a follow-through bear bar on Monday.
If Monday instead is a bull bar, there would be a micro wedge on the daily chart. The bulls would then have almost a 50% chance of forming a double bottom with the November low.
There is not much that the bulls or bears can do today to affect the daily chart. The bears want the week to close near its low. That would create a strong bear bar on the weekly chart. They will therefore sell 20 – 30 pip rallies.
The bulls know how important this week’s bar is for the bears. They will therefore buy around the low of the day. They want the week to close at least 30 pips above its low. That would put a tail on the bottom of the bar on the weekly chart. The weekly breakout would therefore be weaker and less likely to succeed. The bulls next week would then try to create a rally so that they would have a double bottom with the November low.
Because neither the bulls nor the bears can do much today to change the probabilities on the weekly chart, today will probably be mostly sideways for the rest of the day.
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. 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 gapped up above Wednesday’s ledge top. While it was another small trading range day for most of the day, it rallied into the close. The week closed on its high. That increases the chance of a gap up on the weekly chart next week.
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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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.
