Trading Update: Wednesday July 7, 2021
Emini pre-open market analysis
Emini daily chart
- Yesterday’s low was below Thursday’s low so daily chart finally had a pullback after 11-day bull micro channel.
- Pulled back below 60-minute 20-bar EMA for 1st time in 70 bars so that Emini bull streak ended as well.
- Traders were willing to pay an above average price and now finally could buy at the average price. That reduces the downside today.
- Buy climax usually leads to trading range therefore trend reversal down unlikely on daily chart.
- Since buy climax was extreme, might have to go sideways for several days, especially with yesterday closing in the middle of the range.
Emini 5-minute chart and what to expect today
- Emini is up 5 points in the overnight Globex session.
- Big Up Friday, Big Down and Up yesterday creates confusion and increase chance of trading range for a few days.
- 60-minute 20-Gap Bar buy signal created yesterday’s rally. Traders expected test of Friday’s high. Yesterday’s rally met the minimum expectation.
- Extreme buy climaxes on daily and 60-minute charts so probably limited upside over next couple weeks, but should make at least one more new high.
- Trading range likely so increased chance of at least one reversal every day for several days.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Yesterday was big outside down day, but it only broke below the June 2 low by 1 pip.
- Today is the follow-through day after yesterday’s small breakout. So far, today is a bull inside day, which is weak follow-through.
- The bears need a close below the July 2 low to increase the chance of the selloff testing the March 31 low.
- If today has a bull body and closes near its high, it would increase the chance of a reversal up from a micro double bottom with the July 2 low and a lower low major trend reversal with the June 18 low.
- The bulls need a big bull bar closing near its high for traders to expect a reversal up.
- If falls below Friday’s low for a few days and reverses up, then wedge bottom with June 18 low and Friday’s low. That could lead to a 2-week bounce.
- Since many bars with tails for 3 weeks and near bottom of yearlong trading range, should bounce and test June 25 high soon, but might have test March 31 low first.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Reversed down from a new high on the open, but reversed back up from a parabolic wedge sell climax at the 60-minute EMA, which was support yesterday.
- Rallied back to the high, but entered a trading range for the rest of the day. Because the day closed near its high and the reversal up from the 60-minute MEA was strong yesterday and today, traders expect at least slightly higher prices.
- But after yesterday’s pullback in an 11-bar bull micro channel, the bulls are probably unwilling to buy aggressively without a week or two of sideways trading.
- Traders expect higher prices, but not much higher over the next couple weeks.
- Targets above are the top of the bull channel on the daily chart, which is around 4,500, and a measured move up to 4,404 based on the 3-month trading range.
- The bears can get a reversal at any time, but bulls will continue to buy every 1- to 3-day 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, which is 15 minutes after the NYSE closes. You can read background information on the market reports on the Market Update page.