Emini and Forex Trading Update:
Wednesday March 31, 2021
Pre-Open market analysis of daily chart
- Yesterday was a pullback from a 3-day rally. It is therefore a High 1 bull flag buy signal bar.
- However, it had only a small bull body, making it a fairly neutral day (doji day). It is a lower probability buy setup.
- It was an inside day after a rally, and therefore a sell signal bar, as well a possible bull trap. The bears want a reversal down from a double top with the March 17 high. However, yesterday was the 4th consecutive bull day, and it is therefore a weak sell setup.
- The bears want a reversal down. There would then be a double top with the high from 2 weeks ago. But after 4 bull bars, a reversal down would probably not last more than a couple days.
- Today is the final day of March and of the 1st quarter. The bulls want today to close near its high and a strong finish to 1st quarter.
- That would increase the chance of a gap up tomorrow, which would create a gap up on the monthly chart.
- If there is a gap up on the monthly chart tomorrow, the gap will be small on the monthly chart. Small gaps usually close before the bar closes. Therefore, the gap should close in April.
Overnight Emini Globex trading on 5-minute chart
- Up 5 points in Globex session.
- With today at end of month, and near new high, increased chance today will close near all-time high. Bulls want gap up on monthly chart tomorrow, which would increase chance of higher prices and breakout above 4,000 in April.
- Yesterday ended with big bull bar, and higher low double bottom. Bulls are hoping today will break above yesterday’s trading range, and rally for a measured move up to all-time high.
- Bears want break below yesterday’s trading range, and a measured move down. After 4 bull days, probably buyers not far below yesterday’s low, so would probably lead to only 1- to 2-day pullback.
- Last day of month and of quarter, so increased chance of trend day, and increased chance of big move up or down in final hour.
Yesterday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Bear trend since January 6, and especially strong since February 25.
- Bears want selloff to collapse to below November 4 low, which was start of yearend rally.
- But nested wedge sell climax usually leads to profit takers. Probably will get short covering rally for 2-to 3-weeks before reaching November 4 low. That low is target on weekly chart, since it is start of 3rd leg up in wedge.
- 2 small sideways days from 2 days ago might be Final Bear Flag.
- If today is bull bar, especially closing near its high, it could be start of short covering rally.
- 1st target for bulls is March 9 low, which is the most recent breakout point.
- Next target is the March 18 high, which was the start of the 3rd leg down in the wedge.
Overnight EURUSD Forex trading on 5-minute chart
- Reversed up from below yesterday’s low, but then had 50% correction.
- In trading range for 2 hours.
- Bulls want trend resumption up, and for today to close near the high. Today would then be a buy signal bar for nested wedge bottom on daily chart.
- Bears want overnight rally to be bull trap. They want today to close on the low and for 3-month bear trend to continue.
- Day traders have been buying and selling since 50% pullback 4 hours ago. But if there is going to be a trend, up is more likely because the overnight rally was strong, and the daily chart is in a sell climax.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Today gapped up and rallied in a Bull Trend From The Open to a new all-time high. The next target is the 4,000 Big Round Number.
- There was a lot of sideways trading and many bear bars in the 1st 2 hours, but then the Emini accelerated up in a strong Small Pullback Bull Trend.
- There was some profit taking at a measured move up based on yesterday’s range. There is always a 99.5% chance of at least 3 bars with lows below the EMA every day. The pullback came in the 5th hour.
- Midday bear trend reversal continued for rest of day.
- Bull body on daily chart but close below middle so bears won the day.
- I have been saying for a couple weeks that the bulls wanted March to close near its high and for April to gap up on the monthly chart. With the close 20 points below the high, that will probably not happen tomorrow.
- The bears want the Emini to reverse down from below 4,000, but they need to start getting some bear bars. Without strong bear bars, the bulls will continue to buy every 1- to 3-day pullback, despite the buy climaxes on the daily, weekly, and monthly charts.
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 Standard Time
When I mention time, it is USA Pacific Standard Time (the Emini day session opens at 6:30 am PST, and closes at 1:15 pm PST). You can read background information on the intraday market reports on the Market Update page.