Emini and Forex Trading Update:
Wednesday April 7, 2021
Pre-Open market analysis of daily chart
- Emini 8 bull bars streak is unusual and therefore unsustainable and climactic.
- Since yesterday closed in lower third, today or tomorrow will probably be a bear bar.
- Also, today will probably trade below yesterday’s low.
- Open of the day will be a magnet late in the day if the Emini is within 10 points of it.
- 8 consecutive bull bars means aggressive bulls. They will buy below yesterday’s low and the first 1- to 3-day pullback.
- Extreme buy climax, but no sign of major top. Similar to the parabolic rallies in June and October. Both were followed by 10% pullbacks. Traders will continue to buy until there is a strong reversal down.
Overnight Emini Globex trading on 5-minute chart
- Yesterday’s high was a ledge top (5 bars in a tight trading range with identical highs).
- Ledge top is a magnet. Emini should break above it within a few days.
- Down 3 points in Globex market so will likely get gap down.
- Small gaps usually close in 1st hour.
- Bears want big bear day, which would increase chance that yesterday was start of 2-week selloff.
- Today will probably close below the open, but bulls will likely buy 1st 1- to 3-day pullback.
- After 2 big bull days, today will probably not be a big bull trend day.
- While it is possible that today will be a big bear day, and reverse Monday’s rally, a trading range day with a close below the open is more likely.
- Should have at least one swing up, and one swing down today.
- If there is a series of strong trend bars in either direction in the 1st hour, then could get trend day.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Two big bull days closing near their highs so strong reversal up.
- 1st reversal up from tight bear channel is typically minor, which means it is more likely to lead to trading range than to bull trend.
- Reversal up from wedge bottom usually has at least 2 legs up, and often reaches last lower high.
- Traders will buy 1st 2- to 3-day pullback, expecting 2nd leg sideways to up.
- Since this is probably a bull leg in what will be a trading range, and trading ranges disappoint traders, rally should stall today or tomorrow.
Overnight EURUSD Forex trading on 5-minute chart
- Reversed down from above yesterday’s high. Since 3rd consecutive big bear day is unlikely, today will probably be a trading range day.
- Day traders have been selling rallies and buying selloffs, and have been taking quick profits.
- Trading range day will probably continue.
- If there is a series of big trend bars up or down, day traders will switch to swing trading, but trading range day is more likely.
- Open of day will be magnet at end of day. Bulls want 3rd consecutive bull day, which would increase chance of higher prices tomorrow.
- Bears want today to close on its low, which would increase the chance of a pullback tomorrow.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Weak rally on open.
- Reversal down from wedge.
- Late test below open.
- Trading range day, but closed on its high.
- 9th consecutive bull bar on daily chart so unsustainable and climactic.
- No top yet, and traders will continue to bet on higher prices.
- Bulls will buy the 1st reversal down.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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.