Trading Update: Monday August 2, 2021
Emini pre-open market analysis
Emini daily chart
- First day of month. An Emini bear bar should form on August monthly chart.
- Friday triggered micro double top sell signal. Also was expanding triangle. However, Thursday was a bull bar and therefore a weak sell signal bar, especially in strong bull trend.
- High 1 buy signal but tail, 5-day tight trading range.
- Sideways for 5 days in bull trend so odds favor at least slightly higher.
- 5 sideways day increases chance of another sideways day today.
- July closed near its high, so August should trade above July at some point.
- After 6 consecutive bull bars on monthly chart, August should be bear bar, even if there is a new high early in the month.
- Traders are deciding if streak will continue in August. Since that has not happened in more than 10 years, August should close below today’s open of the month.
- Since August should have bear body, if there is a strong rally this week, it will probably be a bull trap and become the high for a few months.
- Since August should have bear body and be the start of 2 – 3 month pullback, there is increased chance of bear days in August. However, there might be a rally in the 1st half of the month.
Emini 5-minute chart and what to expect today
- Emini is up 19 points in the overnight Globex session.
- Will probably gap above Friday’s high, but not above July high, which is all-time high.
- Gap might be small. If so, small gaps usually close in 1st hour.
- After 5 sideways days, increased chance of another sideways day.
Friday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Friday was bear reversal bar and a failed breakout above the July 6 lower high.
- Friday is sell signal bar for double top with July 6 high.
- After consecutive wedge bottoms on July 21, odds favor 2nd leg sideways to up. Therefore, the bulls should buy a 1- to 3-day selloff. This should create a higher low and lead to 2nd leg sideways to up.
- Even though sideways in tight range for a month, the trading range price action began with the June 25 lower high. Therefore, should reach that high before breaking far below July 21 low.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Trading range open (triangle), then strong bear breakout below trading range, the 60 minute EMA, and the 4400 Big Round Number.
- Reversed up from lower low major trend reversal, but continued in lower trading range. A bull leg in the lower trading range is always more likely than a reversal into a bull trend.
- Late break below lower trading range in Trending Trading Range Day.
- The breakout fell below yesterday’s low to form outside down day, but at bottom of tight trading range on daily chart so not strong sell signal bar for tomorrow.
- On daily chart, 3rd reversal down from above July 14 high.
- 7-day tight trading range in strong bull trend so odds continue to favor at least slightly higher prices.
- Tight trading range might continue into Friday’s unemployment report.
- Should go above July high since it was a bull bar closing near its high on the monthly chart.
- However, August should close below open of the month (today’s open) and lead to a 2 to 3-month correction of at least 15%.
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 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.