Emini and Forex Trading Update:
Monday April 5, 2021
Pre-Open market analysis of daily chart
- Friday finally broke above 4000 Big Round Number, and closed on its high, above 4,000.
- Emini went sideways for several days to a couple weeks at every prior Big Round Number since 3,500. Traders expect sideways for at least a few days, but could continue to rally for a week first.
- This is only the 4th multiple of 1,000 in the 100-year history of the S&P so this is a rare event.
- Thursday gapped up, which means there is a small gap on the monthly chart. Small gaps usually close before the bar closes, and therefore the gap should close this month. If not, then probably within a few months.
- Buy climaxes on daily, weekly, and monthly charts, but no top. Traders will continue to expect higher prices until strong reversal down.
- Streak of 6 consecutive bull bars on daily is unusual, and therefore unsustainable, and climactic. Increased chance of bear bar today or soon.
- Most days for several weeks have had at least one swing up, and one swing down, so that is likely today.
- Since market is at such an unusual Big Round Number, increased chance of surprisingly big move up or down. Remember, there are only 3 other data points (1,000, 2,000, and 3,000) in the history of the stock market, so not enough to have an opinion about what will happen based on the multiple of 1,000 alone. But bull trend, so higher prices likely.
- Today will probably gap up on both the daily and weekly charts.
- Since extreme buy climax on both charts, increased chance of 2 or 3 sideways days. Bears will want gap down and island top. Bulls will want bull flag and resumption of strong bull trend.
Overnight Emini Globex trading on 5-minute chart
- Up 26 points in Globex market so will have big gap up today.
- Big gap increases chance of trend day in either direction.
- If there is a trend, up is more likely than down.
- If there is series of strong trend bars up or down in 1st hour, then increased chance of trend day.
- Most days have trading range open for 1st hour or two. That is most likely today.
- Most days have at least one swing up and one swing down.
Thursday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Strong bear trend.
- Today triggered Low 1 bear flag sell signal by going below Friday’s low.
- Target below is November 4 low, which is start of final leg up of wedge top on weekly chart.
- Possible wedge bottom, so might get 2-week short covering rally.
- Bulls hope today will be small higher low and start of rally.
- Targets for bulls are March 9 low, which is the most recent breakout point, and then the March 9 high, which is the start of the most recent sell climax.
Overnight EURUSD Forex trading on 5-minute chart
- Fell below yesterday’s low, which triggered Low 1 sell signal on daily chart.
- Reversed up strongly from Expanding Triangle bottom.
- Rally has been strong enough for traders to expect at least a small 2nd leg sideways to up.
- Bulls want bull trend to last all day. They would like today to break above Friday’s high, and become an outside up day. They also want today to close on the high.
- Day traders have only been buying of the past couple hours.
- They will continue to only buy until there is at least a 20-pip selloff.
- If there is a 20-pip selloff, a trading range will be more likely than a bear trend.
- Bulls will buy pullbacks, and then bears will sell reversals down from new highs for scalps.
- Since this is possible start of 2-week rally, some bulls will look to hold part of their position for a leg up on the daily chart.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Gap up to new all-time high on daily and weekly charts.
- Strong Bull Trend From The Open.
- Since there were many early big bull bars with not much of a pause, bulls were probably going to become exhausted. That made a trading range likely.
- Wedge top and midday trend reversal.
- Lower higher major trend reversal and head and shoulders top, but continue in trading range instead of reversing into bear trend.
- For tomorrow, bulls want trend resumption up and bears want trend reversal down.
- Tomorrow will probably have at least one swing up and one swing down after today’s buy climax and trading range.
- Buy climax is getting extreme. That increases chance of profit taking for a couple days, but bulls will buy the first pullback,
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 intraday market reports on the Market Update page.