{"id":143657,"date":"2022-02-09T06:20:00","date_gmt":"2022-02-09T14:20:00","guid":{"rendered":"https:\/\/www.brookstradingcourse.com\/?p=143657"},"modified":"2022-02-09T13:52:35","modified_gmt":"2022-02-09T21:52:35","slug":"emini-higher-low-major-trend-reversal","status":"publish","type":"post","link":"https:\/\/www.brookstradingcourse.com\/es\/analysis\/market-update\/emini-higher-low-major-trend-reversal\/","title":{"rendered":"Emini Higher Low Major Trend Reversal but in 7-month trading range"},"content":{"rendered":"\n<h3 class=\"wp-block-heading\">Trading Update: Wednesday February 9, 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>Yesterday was an outside up day, and it closed just above Monday&#8217;s high, which is a sign of strength. It was also the 4<sup>th<\/sup> day in the pullback from the strong rally to the February 2 high. <\/li><li>There is now a micro double bottom, and yesterday is a buy signal bar. The Emini should trade up for at least a couple days.<\/li><li>The bulls hope the 4-day pullback is a bull flag. Since last week&#8217;s rally was a Bull Surprise, this week should test last week&#8217;s high.<\/li><li>They want a resumption of the V-bottom reversal up, and they want it to lead to a new all-time high.<\/li><li>The bears know that the Emini should trade up for at least a couple days. However, they are hoping that the 3-week rally is just a pullback from the January collapse. They want a lower high and a test of the January low.<\/li><li>The Emini is still in the middle of a 7-month trading range. It is therefore fairly neutral, despite the big selloff in January and the strong rally in February.<\/li><li>Traders need more information before being confident of a 2<sup>nd<\/sup> leg down or a continuation of the V-bottom rally.<\/li><li>More information means more bars. If there is a series of strong bull bars, the Emini should make a new high soon. <\/li><li>If there is a series of bear bars, it should continue down to around 4,000.<\/li><li>On the monthly chart, there are now back-to-back OO patterns (consecutive outside bars). <\/li><li>This is coming late in the strong bull trend on the monthly chart. A 2<sup>nd<\/sup> attempt to reverse has a higher probability of success. <\/li><li>It is therefore still more likely that the rally from the January low will form a lower high on the daily chart, and it will lead to a test of the January low before making a new high. <\/li><li>In fact, because of the 2<sup>nd<\/sup> reversal attempt on the monthly chart, traders want to know what will happen if the OO sell signal triggers. Will there be more buyers or sellers below the January low?<\/li><li>The bulls hope the bear breakout below the January low will fail. Traders should understand that the selloff has a 50% chance of falling below the January low, a 40% chance of dipping below the 4,000 big round number, but only a 30% chance of reaching the pre-pandemic high.<\/li><li>They also should know that a bear trend on the monthly chart is rare. Therefore, the selloff should end in March or April.<\/li><li>February so far is a small inside bar on the monthly chart and it is in the middle of January&#8217;s huge range. I have said several times that February might remain in inside bar and it might even have a bull body. <\/li><li>However, it is still slightly more likely that the Emini will break below the January low before going above the January high. I also said that the breakout might wait until March.<\/li><li>When a selloff ends, either the bull trend resumes or the market enters a trading range.<\/li><li>Since the bull trend on the monthly chart is strong, there should be at least one more new high before the bears will have a reasonable chance of a bear trend on that chart.<\/li><li>Therefore, the bull trend should resume within a couple months, or after a trading range. <\/li><li>The bulls are hoping that the current rally is the resumption of the bull trend. If it is, there should be a new high within a month.<\/li><li>If the monthly chart enters a trading range, it could last as long as a year before there will be a new high, but a new high is likely before the bears can get much more than a 20% correction.<\/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 41 points in the overnight Globex session. Today should open with a big gap up. As I wrote above, the Emini should try to test last week&#8217;s high. Today is the start of that test. If today sells off, there will be a micro double top.<\/li><li>Whenever there is a big gap up, there is an increased chance of a trend day. If there is a trend, up is slightly more likely than down.<\/li><li>If there is a series of strong trend bars in either direction early in the day, the odds of a trend go up.<\/li><li>When there is a big gap up, the Emini is far above the average price (the EMA). Bulls only want to buy if the bars are very bullish.<\/li><li>Most of the time, a big gap up leads to a trading range open. The Emini goes sideways to down to near the EMA. At that point, the bulls look for a double bottom or wedge bottom, and then a trend up.<\/li><li>The bears know that the Emini typically gets near the EMA within the 1st hour or two. They look for a double top or a wedge top and then a swing down to the EMA.<\/li><li>Since a trading range open is likely, there tends to be some neutrality. That reduces the chance of a strong trend. <\/li><li>If there is a trend, it will probably be a weaker trend, like a trending trading range day or a broad channel. <\/li><li>If there is a strong trend up, there is an increased chance of exhaustion. The market tends to enter a trading range after a couple hours.<\/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\/02\/Emini-outside-up-day-and-trend-resumption-up-day-with-higher-low-major-trend-reversal-and-failed-head-and-shoulders-top.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-outside-up-day-and-trend-resumption-up-day-with-higher-low-major-trend-reversal-and-failed-head-and-shoulders-top-680x383.png\" alt=\"Emini outside up day and trend resumption up day with higher low major trend reversal and failed head and shoulders top\" class=\"wp-image-143807\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-outside-up-day-and-trend-resumption-up-day-with-higher-low-major-trend-reversal-and-failed-head-and-shoulders-top-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-outside-up-day-and-trend-resumption-up-day-with-higher-low-major-trend-reversal-and-failed-head-and-shoulders-top-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-outside-up-day-and-trend-resumption-up-day-with-higher-low-major-trend-reversal-and-failed-head-and-shoulders-top-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-outside-up-day-and-trend-resumption-up-day-with-higher-low-major-trend-reversal-and-failed-head-and-shoulders-top.png 960w\" 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\/02\/EURSUD-Forex-High-1-bull-flag-in-bull-trend-reversal-but-possible-double-top.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURSUD-Forex-High-1-bull-flag-in-bull-trend-reversal-but-possible-double-top-680x383.png\" alt=\"EURSUD Forex High 1 bull flag in bull trend reversal but possible double top\" class=\"wp-image-143951\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURSUD-Forex-High-1-bull-flag-in-bull-trend-reversal-but-possible-double-top-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURSUD-Forex-High-1-bull-flag-in-bull-trend-reversal-but-possible-double-top-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURSUD-Forex-High-1-bull-flag-in-bull-trend-reversal-but-possible-double-top-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/EURSUD-Forex-High-1-bull-flag-in-bull-trend-reversal-but-possible-double-top.png 960w\" sizes=\"auto, (max-width: 680px) 100vw, 680px\" \/><\/a><\/figure>\n\n\n\n<ul class=\"wp-block-list\"><li>Last week rallied strongly from a failed breakout below a 9-week tight trading range. I have been saying for a couple months that the trading range would be a Final Bear Flag and that a bear breakout would fail. <\/li><li>I have also been saying that the EURUSD should rally for at least a couple months. This is because the yearlong bear trend is still in an 8-year trading range. It is therefore more likely a leg in the range than a resumption of the 15-year bear trend.<\/li><li>A bear leg in a trading range usually leads to a bull leg. Since the bear leg has lasted a long time and reached support at the June 26, 2020 higher low, last week&#8217;s rally will probably be the start of a leg up. A leg up should last at least a couple months.<\/li><li>The rally stalled at the January 14 high. It could go sideways to down for a few weeks as traders decide between a reversal down from a double top and a break above the January 14 high.<\/li><li>The bears want a reversal down from a double top and then a measured move down below the January low.<\/li><li>Today so far is a bull bar closing near its high. The bulls are trying again to break above the January 14 high. They should be successful within the next few days, but there is a 40% chance that the pullback will correct 50% of last week&#8217;s rally before the bulls get their breakout.<\/li><li>The bulls want a breakout above the double top and a measured move up to above 1.18. That is also around the October 28 high, which was the start of the strong leg down. This is more likely than a breakout below the January low.<\/li><li>But, what if Russia invades the Ukraine AND Europe messes up the response? The EURUSD will quickly go down to the bottom of the 8-year range. <\/li><li>At the moment, the chart is saying that if Russia invades, Europe will handle it well, and the crisis won&#8217;t be disastrous for the EURUSD. <\/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\/02\/Emini-wedge-bull-flag-at-the-EMA-and-then-220-Gap-Bar-Buy-and-Broad-Bull-Channel.png\"><img loading=\"lazy\" decoding=\"async\" width=\"680\" height=\"383\" src=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bull-flag-at-the-EMA-and-then-220-Gap-Bar-Buy-and-Broad-Bull-Channel-680x383.png\" alt=\"Emini wedge bull flag at the EMA and then 220-Gap Bar Buy and Broad Bull Channel\" class=\"wp-image-143982\" title=\"\" srcset=\"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bull-flag-at-the-EMA-and-then-220-Gap-Bar-Buy-and-Broad-Bull-Channel-680x383.png 680w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bull-flag-at-the-EMA-and-then-220-Gap-Bar-Buy-and-Broad-Bull-Channel-300x169.png 300w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bull-flag-at-the-EMA-and-then-220-Gap-Bar-Buy-and-Broad-Bull-Channel-768x432.png 768w, https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-wedge-bull-flag-at-the-EMA-and-then-220-Gap-Bar-Buy-and-Broad-Bull-Channel.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>The Emini had a big gap up, and then went sideways, as it usually does after a big gap.<\/li><li>The bulls had a weak rally for a couple hours to just below last week&#8217;s high. Remember, I said that last week&#8217;s rally was strong enough to expect a test of its high.<\/li><li>After consecutive wedges at a new high of the day, the Emini reversed down sharply, back into the earlier trading range (today, a triangle).<\/li><li>It then reversed up sharply to a new high and then sharply again. The Emini today was in a Broad Bull Channel.<\/li><li>Big legs and sharp reversals indicate uncertainty and usually results in a trading range. Traders are probably nervous ahead of tomorrow&#8217;s inflation report.<\/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 February 9, 2022 Emini pre-open market analysis Emini daily chart Yesterday was an outside up day, and it closed just above Monday&#8217;s high, which is a sign of strength. It was also the 4th day in the pullback from the strong rally to the February 2 high. There is now a micro [&hellip;]<\/p>\n","protected":false},"author":4,"featured_media":143807,"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":[281,1395,60],"class_list":{"0":"post-143657","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-higher-low-major-trend-reversal","10":"tag-sp-emini","11":"entry","12":"override","13":"shadow"},"featured_image_src":"https:\/\/www.brookstradingcourse.com\/wp-content\/uploads\/2022\/02\/Emini-outside-up-day-and-trend-resumption-up-day-with-higher-low-major-trend-reversal-and-failed-head-and-shoulders-top.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\/143657","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=143657"}],"version-history":[{"count":0,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/posts\/143657\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media\/143807"}],"wp:attachment":[{"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/media?parent=143657"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/categories?post=143657"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.brookstradingcourse.com\/es\/wp-json\/wp\/v2\/tags?post=143657"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}