Emini and Forex Trading Update:
Monday April 19, 2021
Pre-Open market analysis of daily chart
- Friday was a 2nd bear bar in 3 days after the streak of 13 consecutive bull bars ended on Wednesday. Emini now at start of 5th week of strongest rally in a year.
- This is a sign that bulls are starting to take profits.
- The streak was the longest streak in 10 years, and the Emini is therefore extremely overbought. This therefore increases the chance of a 5 to 10% profit taking selloff starting at any time.
- Until there is a reversal down, traders will bet that the market will continue to do what it has been doing, and that means buying.
- The Emini will probably have to transition into a trading range, for at least a few days before the bears can get more than a 3-day pullback.
Overnight Emini Globex trading on 5-minute chart
- The Emini is down 8 points in the Globex session.
- On the daily chart, it is extremely overbought. That increases the chance of a big bear day at any time.
- The 2 bear days last week in a buy climax reduce the chance of a big bull trend day.
- Most recent days have had at least one leg up and one leg down.
- Most recent days have had a lot of trading range trading.
- Day traders will expect that again today.
- If there is a series of consecutive trend bars up or down in the 1st hour, there would be an increased chance of a strong trend day.
Friday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Strong 4-week rally breaking above March 18 lower high. Bulls need bull bar today to confirm the breakout.
- If today is a bear bar, might get a pullback over the next week.
- Rally is within 9-month trading range. Bulls trying to get back up into upper Dec/Feb trading range within 9-month range.
- 9-month trading range likely to continue for at least a couple months.
- Rally is strong enough so that bulls will buy the 1st 1- to 2-week selloff.
- Tight bull channels constantly form wedge tops, but most lead to minor reversals (bull flags).
- The 2 consecutive inside bars (ii pattern) from 5 days ago, is a possible Final Bull Flag, which is a magnet below.
Overnight EURUSD Forex trading on 5-minute chart
- Rallied in Small Pullback Bull Trend overnight. Day traders have only been buying.
- Mostly sideways for 5 hours, so many bulls have switched to buying for scalps, instead of for swing trades.
- Day traders are only buying.
- They will only start to sell for scalps after there has been at least a 20-pip pullback. They will only scalp since a trend down is unlikely.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
End of day summary
- Bear Trend From The Open, and Spike and Channel Bear Trend.
- Broke below 60-minute EMA (not shown).
- Bulls made money beneath every prior low for the 1st half of the day. Also, there were many big bull bars. These were signs that the selloff was not a strong bear trend.
- After a couple attempts at a wedge bottom, bulls got a Midday Trend Reversal up.
- There was a higher low major trend reversal. It was after a wedge bottom so it was also a Head and Shoulders bottom.
- This ended the bear trend, but it did not begin a bull trend.
- Instead, the bear channel evolved into a trading range.
- Today was the 3rd bear day in the past 4 days, after 13 consecutive bull days. This was more profit taking.
- Profit taking after an extreme buy climax is a sign that the Emini might have a hard time going much higher for several months. It increases the chance of a trading range. The bottom of the range might be 10% or more down from the high.
- Emini could go a little higher before probing down to find the bottom of the range.
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.