Trading Update: Friday August 13, 2021
Emini pre-open market analysis
Emini daily chart
- Another day, another new high. An Emini relentless rally.
- Tight bull channel for 2 weeks after strong reversal up from July 19 low. No sign of top. Traders continue to expect higher prices. They will buy 1- to 3-day pullback.
- Getting near top of bull channel based on the May 7 and July 14 highs, which is about 10 points above yesterday’s high. If bulls get breakout above it, the Emini will probably start to reverse back down within about 5 days. Most breakouts above bull channels fail before getting very far.
Emini 5-minute chart and what to expect today
- Emini is up 5 points in the overnight Globex session.
- If today gaps up, the gap will be small. Small gaps typically close in the 1st hour.
- Yesterday was a buy climax. There is therefore a 75% chance of at least a couple hours of sideways to down trading today that begins by the end of the 2nd hour. There is a 50% chance of follow-through buying in the 1st hour.
- Today is Friday so weekly support and resistance can be important, especially in the final hour.
- The bulls want a bull body and for the week to close near the high. That would increase the chance of higher prices next week.
- A close near the high of the week would also increase the chance of a gap up next week on the weekly chart.
- The bears want the week to close below the open of the week. That would increase the chance that next week will trade below this week’s low. However, today would have to completely reverse yesterday’s strong rally, and that is unlikely.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Today is start of follow-through buying after Wednesday’s small reversal up from double bottom with March low.
- Today’s low is a higher low micro double bottom with August 11 low. Bulls have the minimum they need for a 3-week rally to July 30 lower high.
- Today is Low 1 sell signal bar. Also, it is a micro double top bear flag with Wednesday’s high. If today remains a bull bar, it would be a weak sell signal bar. That means there would probably be more buyers than sellers below its low, and the market would more likely go sideways for a few days rather than down.
- Bears want break below March low and then below November low, which is bottom of yearlong trading range.
- Since most breakouts of trading ranges fail, there will probably be more buyers than sellers soon. That includes below the November low. The bulls are trying to begin the reversal up this week.
Today is Friday so weekly chart is important
- Today is Friday so weekly support and resistance can be important. The bears want the week to close on its low.
- The bulls would like it to close above the open of the week so that this week would be a buy signal bar on the weekly chart for a micro wedge bottom over the past 8 weeks, and a double bottom with the March Low.
- The bigger the bull body, the more likely the EURUSD has begun a rally to the July and June highs.
- If this week has a bear body and closes on the low, which is unlikely, traders will expect lower prices next week.
- If this week closes in the middle of its range, traders will look for a sideways week next week.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- After yesterday’s buy climax, a couple hours of sideways to down trading was likely to begin in the 1st 2 hours. It began on the open and lasted all day.
- There was a late bear breakout, but it failed, as was likely on a trading range day.
- The bull trend on the daily chart is strong. Traders should expect a breakout above the top of the bull channel on the daily chart. Monday might gap up above this week’s high and the top of the bull channel.
- Most breakouts fail within about 5 days. Therefore, if next week breaks above the bull channel, the Emini should then reverse down to at least the middle of the channel over the following couple weeks.
- The bears want a bear bar on the monthly chart in August. If they get it, the Emini will probably begin a 15 to 20% correction.
- Today closed just above the open.
- A small bear bar is a low probability sell setup. There will probably be buyers not far below today’s low.
See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.
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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.