Trading Update: Thursday June 24, 2021
Emini pre-open market analysis
Emini daily chart
- After 2 big bull days, yesterday was likely to pause, and it did. It was a small bear doji bar.
- The Emini might pull back for a day or two, but traders should expect a break to new high.
- Yesterday is a sell signal bar for a double top with June 14 all-time high.
- Since it was only a small bear bar, it is a weak sell signal. There will probably be more buyers than sellers below its low.
- The reversal up on Monday and Tuesday from the sell climax test of the 50-day MA and the bull trend line was strong enough to continue up to a new high.
- There is a 40% chance that the rally goes up for a 200-point measured move over the next month.
- In addition to the Emini being in strong bull trends on the weekly and monthly charts, the Emini tends to rally at the end of June.
- Can this rally be a bull trap and reverse down from the top of the 3-month trading range? There is currently a 40% chance. If there is a big bear bar closing near its low this week or three consecutive small bear bars, the bears will have a 50% chance of stopping preventing a bull breakout.
Emini 5-minute chart and what to expect today
- Emini is up 20 points in the overnight Globex session.
- Might gap up to new all-time high.
- Bears want a double top with June 14 high.
- Bulls want resumption of 2-day rally and strong breakout.
- Increased chance of trend day.
- If trend, up is more likely.
- If another trading range day, odds still favor strong breakout above trading range within a week.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Small bear body yesterday. It is a weak Low 1 sell signal bar, especially after 2 bull bars and a sell climax.
- Many bears will wait for a 2nd leg up before selling again after a sell climax.
- Is the selloff a bear trap? After such a strong selloff, most bulls will want at least a micro double bottom before concluding that the bear breakout is failing.
- With many bulls and bears waiting for 2nd signals, the EURUSD might have to go sideways for at least a couple more days.
- Tomorrow is the last day of the week.
- Bulls want the week to close near its high to increase the chance of higher prices next week.
- Bears want the week to close below the midpoint of the week to increase the chance of sideways to down trading next week.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Today gapped up to a new all-time high.
- A gap up above major resistance often leads to a few sideways days before traders decide if the gap is the start of a big rally or a bull trap.
- Odds favor higher prices. Despite buy climaxes on weekly and monthly charts, there is no credible top. Also, end of June into early July is seasonally bullish.
- At least 30% chance of 200-point measured move up, and it could happen quickly. Look at the early April breakout as an example.
- Bears want wedge rally to a higher high double top. Wedge is May 7 and June 14.
- Also, a reversal down would be a nested expanding triangle starting April 16 and again May 25.
- Bears need consecutive big bear bars closing on their lows before traders will think that a correction might be underway.
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 opens at 6:30 am PT, and closes at 1:15 pm PT). You can read background information on the market reports on the Market Update page.