Trading Update: Wednesday June 9, 2021
Emini pre-open market analysis
Emini daily chart
- Emini new high in 10-day tight trading range at top of 9-week trading range, so Breakout Mode.
- Strong trend since May 19 low, and strong trend since March 2020 low, so odds slightly favor bull breakout.
- There is a measured move target at 4,244.00 on the weekly chart that I have talked about for months. It is an important magnet, and only 21 points above today’s high.
- Bulls want strong breakout above 9-week tight trading range, and then a 200-point measured move up, based on the height of the range.
- Bulls need a couple bull bars closing near their highs, before traders will conclude that the breakout is successful.
- Yesterday made a new all-time high on the open, but then reversed down to below Monday’s low. It was therefore an outside down day.
- Traders bought below Monday’s low, and the Emini reversed back up to above yesterday’s high, becoming an outside up day.
- Yesterday tested into gap below June 4 low, but did not close the gap.
- There have been several breakouts, above and below the trading range since it began in April.
- Each one reversed and led to a breakout in the opposite direction. This is therefore an expanding triangle.
- Since that is just a type of trading range, it does not change anything. The chart is still in Breakout Mode.
- Yesterday was another breakout above the range, but the bulls need follow-through buying today, or tomorrow for the breakout to be successful.
- The bears need a bear bar and a reversal down within the next few days, for traders to conclude that the breakout has failed.
Overnight Emini Globex trading on 5-minute chart
- Up 7 points in Globex session. Might gap above yesterday’s high. If so, gap will probably be small, and small gaps typically close in 1st hour or so.
- Most days over past few weeks have had at least one swing up and one swing down, so traders will look for at least one reversal today.
- Since testing top of trading range, there should be either strong breakout, or strong reversal down at some point, which means one or more strong trend days in either direction.
- If series of strong trend bars in the 1st hour, day traders will expect trend day. If not, they will look for reversals, like they have been doing for a couple weeks.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Near the top of 12-month and 7-year trading ranges.
- Yesterday was a small bear inside day, in middle of 4-week tight trading range.
- A bear bar is a low probability High 1 buy signal bar. There is an increased chance of sellers above.
- Trading range is Breakout Mode, which means that the probability of a successful bull breakout, is about the same as a successful bear breakout.
- Strong bull trend since March 31, so odds slightly higher for bull breakout.
- Friday reversed up from a 3-week wedge bull flag.
- Traders see yesterday as a pullback from Friday’s and Monday’s rally, which was the 1st leg up. Bulls hope that today is start of 1- to 3-day 2nd leg up.
- Bears want double top with June 1 high, which would be double top lower high major trend reversal.
- There is no sense that the price is terribly wrong and therefore no emotion to create a sustained move in either direction.
- All trading ranges eventually break into trends, but until they do, traders will continue to look for reversals every few days.
Overnight EURUSD Forex trading on 5-minute chart
- Today broke above yesterday’s high, which triggered a High 1 bull flag buy signal in the rally that began June 4.
- Breakout stalled at 3 pips above yesterday’s high, and therefore the breakout has been weak. This was likely because yesterday was a bear bar in a tight trading range.
- Day traders so far have been scalping up and down.
- They will switch to swing trading if there is a series of strong trend bars up or down, but there is no sign of that yet.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
- Double top with yesterday’s all-time high on the open.
- Micro double top and Low 2 top, but led to trading range instead of bear trend.
- After small sell climax and 2nd leg down, reversed back up.
End of day summary
- High 2 top on the open, but then tight trading range for most of day.
- Continued to make lower highs all day so bear channel.
- Late bear breakout and measured move down to below Globex low.
- Today is bear inside day after outside day on daily chart so ioi Breakout Mode pattern.
- Just below weekly measured move target at 4,244.
- Tight trading range for 9 weeks so weekly chart is also in Breakout Mode.
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.