{"id":142683,"date":"2022-01-26T06:20:00","date_gmt":"2022-01-26T14:20:00","guid":{"rendered":"https:\/\/www.brookstradingcourse.com\/?p=142683"},"modified":"2022-01-26T19:53:42","modified_gmt":"2022-01-27T03:53:42","slug":"emini-pausing-after-sell-climax","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/analysis\/market-update\/emini-pausing-after-sell-climax\/","title":{"rendered":"Emini pausing after sell climax to below October low"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Trading Update: Wednesday January 26, 2022<\/h3>\n\n\n\n<h2 class=\"wp-block-heading\">Emini pre-open market analysis<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">Emini daily chart<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Monday was a big bull bar closing near its high. It was a buy signal bar for a break below the October low, which was the bottom of the 6-month trading range. <\/li><li>The bulls also want a reversal up from the 200-day MA.<\/li><li>Finally, there are 2 legs down from the high, and a Spike and Parabolic Wedge Sell Climax. Emini pausing after sell climax.<\/li><li>Yesterday was a doji inside day. It is a High 2 buy signal bar for the bulls and a Low 1 sell signal bar for the bears. But a doji bar is a low probability signal bar, which reduces the probability of a big move today above it or below it.<\/li><li>If today or tomorrow goes above yesterday&#8217;s high and especially above Monday&#8217;s high, the Emini will trigger the buy signal.<\/li><li>For the bears, yesterday is a Low 1 sell signal bar in a strong bear trend. But after Monday&#8217;s big reversal up at the bottom of a trading range, there probably will be buyers either below yesterday&#8217;s low or below Monday&#8217;s low. The chance of a continued collapse this week is small.<\/li><li>Traders should expect the Emini to start to go sideways to up soon for at least a week or two. <\/li><li>The January wedge top will probably get at least a small 2<sup>nd<\/sup> leg down. Therefore traders will look to sell again after a bounce of at least several days. <\/li><li>The bounce will probably go back above the December low since that was a major breakout point. It might retrace 50% of January&#8217;s selloff.<\/li><li>The bears hope Monday was a bull trap and that the collapse resumes today. A reversal up from a sell climax is likely before the Emini falls much below Monday&#8217;s low.<\/li><li>The open of the week could be a magnet all week. The bears want a follow-through bear bar, especially one closing near its low. That would increase the chance of lower prices next week.<\/li><li>The bulls want the week to close on its high. That would increase the chance of a bounce for 1 to 3 weeks. <\/li><li>At a minimum, they want the week to close above the open. That will reduce the chance of lower prices next week.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Emini 5-minute chart and what to expect today<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Emini is up 66 points in the overnight Globex session.<\/li><li>It might gap above yesterday&#8217;s high. If the gap is small, it will probably close in the 1st hour.<\/li><li>The Emini has been in a trading range for 6 months. Breakouts typically have pullbacks that go beyond breakout points. The December 20 low was a major breakout point. There is a 60% chance that there will be a rally to above that low within a week.<\/li><li>With the 2-day micro bottom and consecutive bull bars, there is an increased chance of a reversal up that could last a couple weeks. That increases the chance of a bull trend day. <\/li><li>However, after a sell climax, the market often goes sideways for 5 to 10 bars before deciding on its next direction. That increases the chance of a reversal back down early today.<\/li><li>If there is a series of strong trend bars in either direction, there will be an increased chance of a trend.<\/li><li>If most of the early bars have prominent tails and there are a lot of reversals, the odds will favor a trading range day.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\">Yesterday&#8217;s Emini setups<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day-680x383.png\" alt=\"Emini close at open so doji day and trading range day. Pausing after sell climax.\" class=\"wp-image-142835\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day-1536x864.png 1536w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day.png 1920w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<p class=\"caption\">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).<\/p>\n\n\n\n<p class=\"caption\">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.<\/p>\n\n\n\n<p class=\"caption\">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.<\/p>\n\n\n\n<p class=\"caption\">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.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">EURUSD Forex market trading strategies<\/h2>\n\n\n\n<h3 class=\"wp-block-heading\">EURUSD Forex daily chart<\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-selling-off-to-bottom-of-trading-range-after-reversal-down-in-bear-channel.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-selling-off-to-bottom-of-trading-range-after-reversal-down-in-bear-channel-680x383.png\" alt=\"EURUSD Forex selling off to bottom of trading range after reversal down in bear channel\" class=\"wp-image-142867\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-selling-off-to-bottom-of-trading-range-after-reversal-down-in-bear-channel-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-selling-off-to-bottom-of-trading-range-after-reversal-down-in-bear-channel-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-selling-off-to-bottom-of-trading-range-after-reversal-down-in-bear-channel-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-selling-off-to-bottom-of-trading-range-after-reversal-down-in-bear-channel-1536x864.png 1536w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/EURUSD-Forex-selling-off-to-bottom-of-trading-range-after-reversal-down-in-bear-channel.png 1920w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Drifting down in a tight bear channel since the January 14 failed breakout above the 2-month trading range. Also, still in bear channel that started a year ago.<\/li><li>Near bottom of the 2-month range. Lots of overlap among the past 5 days, but the bars are forming lower highs and lows so bearish. <\/li><li>While slightly more bearish than bullish because of the trend down for 2 weeks, it is barely better than 50-50 for the bears because it is still in the 2-month tight trading range.<\/li><li>Until there is a breakout, there is no breakout.<\/li><li>Bears hope that Jan 14 high was simply a test of the Nov 15 low, and that it formed another lower high in the yearlong bear channel. <\/li><li>They want a measured move down from the Sept 3 high to the Nov 15 low. <\/li><li>That would be a test of the June 19, 2020 low at the start of the 2020 bull channel.<\/li><li>The bears want a breakout below that low and then a breakout below the 7-year trading range.<\/li><li>The bulls hope that the 2-month trading range will be the Final Bear Flag. The odds are that it will be, which means they expect a breakout below will fail within a few weeks. It would be unusual for the yearlong bear trend to reverse all of the 2020 strong rally without at least a bounce of a couple months.<\/li><li>However, the early January rally is failing. The odds slightly favor a breakout below the 2-month trading range. But, there will probably be a reversal back up within a few weeks of the breakout.<\/li><li>A tight trading range is a bad environment for traders looking for a trend. Traders are looking for reversals every few days, waiting for a strong breakout in either direction, or for a failed breakout.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Summary of today&#8217;s S&amp;P Emini futures price action and what to expect tomorrow<\/h2>\n\n\n\n<figure class=\"wp-block-image size-large\"><a href=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-top-and-bottom-then-FOMC-failed-bull-breakout-and-higher-high-major-trend-reversal.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-top-and-bottom-then-FOMC-failed-bull-breakout-and-higher-high-major-trend-reversal-680x383.png\" alt=\"Emini wedge top and bottom then FOMC failed bull breakout and higher high major trend reversal\" class=\"wp-image-142886\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-top-and-bottom-then-FOMC-failed-bull-breakout-and-higher-high-major-trend-reversal-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-top-and-bottom-then-FOMC-failed-bull-breakout-and-higher-high-major-trend-reversal-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-top-and-bottom-then-FOMC-failed-bull-breakout-and-higher-high-major-trend-reversal-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-wedge-top-and-bottom-then-FOMC-failed-bull-breakout-and-higher-high-major-trend-reversal.png 960w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<h3 class=\"wp-block-heading\">End of day summary<\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li>Today opened with a small gap up, which closed in the first few minutes. <\/li><li>It reversed down from a wedge top and then up from a wedge bottom.<\/li><li>It was in a tight trading range until the FOMC announcement.<\/li><li>It broke to a new high and reversed down from a micro double top, higher high major trend reversal, bull trap, and Final Flag Top.<\/li><li>Today is a bear bar on the daily chart and a Low 1 sell signal bar in a bear trend. But it has a big tail below and there are 3 mostly overlapping days, so this is a weak sell setup.<\/li><li>Tomorrow will probably trade below its low and trigger the sell signal.<\/li><li>However, the January sell climax was extreme and the Emini reversed up sharply on Monday. <\/li><li>The odds are that it will trade sideways to up for at least a couple weeks. It should get above the December low.<\/li><li>If there is a new leg down, it will probably be brief. The Emini should not fall much further before the bears take profits and the bargain hunters buy.<\/li><\/ul>\n\n\n\n<p><em>See the <a rel=\"noreferrer noopener\" href=\"https:\/\/www.brookstradingcourse.com\/blog\/analysis\/\" target=\"_blank\">weekly update<\/a> for a discussion of the price action on the weekly chart and for what to expect going into next week.<\/em><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<h2 class=\"wp-block-heading\">Trading Room<\/h2>\n\n\n\n<p>Traders can see the end of the day <a href=\"http:\/\/www.brookspriceaction.com\/profile.php?mode=profil&amp;sub=profile_prefer&amp;mod=0\" target=\"_blank\" rel=\"noreferrer noopener\">bar-by-bar price action report by signing up<\/a> for free at BrooksPriceAction.com. I talk about the detailed S&amp;P Emini futures price action real-time throughout the day in the BrooksPriceAction.com on <a href=\"https:\/\/www.brookstradingcourse.com\/online-day-trading-room\/\" target=\"_blank\" rel=\"noreferrer noopener\">trading room<\/a> days. We offer a <a href=\"http:\/\/www.brookspriceaction.com\/portal.php?page=11\" target=\"_blank\" rel=\"noreferrer noopener\">2 day free trial<\/a>.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<h3 class=\"wp-block-heading\">Charts use Pacific Time<\/h3>\n\n\n\n<p>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 <a href=\"https:\/\/www.brookstradingcourse.com\/blog\/market-update\/\" target=\"_blank\" rel=\"noreferrer noopener\">Market Update<\/a> page.<\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n","protected":false},"excerpt":{"rendered":"<p>Trading Update: Wednesday January 26, 2022 Emini pre-open market analysis Emini daily chart Monday was a big bull bar closing near its high. It was a buy signal bar for a break below the October low, which was the bottom of the 6-month trading range. The bulls also want a reversal up from the 200-day [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":142835,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_genesis_hide_title":false,"_genesis_hide_breadcrumbs":false,"_genesis_hide_singular_image":false,"_genesis_hide_footer_widgets":false,"_genesis_custom_body_class":"","_genesis_custom_post_class":"shadow","_genesis_layout":"","footnotes":""},"categories":[153],"tags":[281,60,1380],"class_list":{"0":"post-142683","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-market-update","8":"tag-eurusd-forex","9":"tag-sp-emini","10":"tag-sell-climax","11":"entry","12":"override","13":"shadow"},"featured_image_src":"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/01\/Emini-close-at-open-so-doji-day-and-trading-range-day.png","author_info":{"display_name":"Al","author_link":"https:\/\/www.brookstradingcourse.com\/es\/author\/albrooks\/"},"_links":{"self":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/142683","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/comments?post=142683"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/142683\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media\/142835"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=142683"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=142683"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=142683"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}