Trading Update: Monday June 7, 2021
Emini pre-open market analysis
Emini daily chart
- Friday triggered High 1 buy signal and closed on its high.
- Since Friday closed just below all-time high, in wedge rally test, it might gap up to new all-time high today.
- Friday could not break to all-time high, so possible double top with May 7 high.
- Bears need strong reversal down from here, or from a failed breakout above May high.
- If a breakout above the May high reverses down this week, there will be a wedge top with the May 14 and June 1 highs.
- Wedge rally to a double top is a reasonable sell signal, but most reversals fail, so only buy a bull breakout on the daily chart for a swing trade.
- Until there is a clear, strong reversal down, traders will continue to expect new highs.
Overnight Emini Globex trading on 5-minute chart
- Up 3 points in Globex session, but just below the May 7 all-time high, so might gap up and go to a new high today. There would then be a gap up on the weekly chart as well.
- If there is a gap up, it will probably be small. Small gaps typically close in the 1st hour.
- Since the Emini is at the top of a 2-month trading range, it is in Breakout Mode. It is now testing the top of the range, and there is therefore an increased chance of a strong trend day up or down.
- Friday was a buy climax day, and so there is a 75% chance of at least a couple hours of sideways to down trading, that starts by the end of the 2nd hour.
- If today is going to be a trend day, there will probably be a series of strong trend bars in the 1st hour.
- If today is a bull trend day, and it breaks above the May high, there is an increased chance of a midday reversal down, since breakouts in general fail half the time.
Friday’s Emini setups
EURUSD Forex market trading strategies
EURUSD Forex daily chart
- Friday is High 2 buy signal bar, and a wedge bull flag buy signal bar.
- But it had a prominent tail on top, it followed a big bear bar, and it is in the middle of a 2-month trading range. This lowers the probability of a strong move up today.
- Today so far is a small inside doji bar, and there is therefore no evidence of a big move up or down.
- 2-month trading range is Breakout Mode.
- Bulls want a breakout above, and a 200-pip measured move up to above the February 2017 high, which is the top of a 7-year trading range.
- Bears want break below May 5 low at the bottom of the range, and a measured move down to around the March 31 low.
- Slightly more bullish than bearish, but still close to 50% chance of bear breakout.
- Traders continue to look for reversals every few days.
Overnight EURUSD Forex trading on 5-minute chart
- Today so far has a small range, and there have been several reversals. Day traders have been scalping up and down.
- Even though Friday is a buy signal bar, today has not gone above Friday’s high.
- Unless there is a series of strong trend bars in either direction, day traders will continue to scalp today.
- Because Friday is a weak buy setup, there might be more sellers than buyers above Friday’s high.
- Unless there is a strong breakout above Friday’s high, day traders will look to sell a reversal down from above Friday’s high.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
- Bear Trend From The Open. Reversed down from just below all-time high and from Globex high.
- Entered trading range above Globex low and yesterday’s low.
- Reversed back up to above midpoint of day’s range and closed in middle of day.
- Today was one of the 10% of days that do not break out of the Globex range.
- Today was an inside day on the daily chart.
- It had a bear body and it is therefore a low probability buy signal bar.
- It came after 2 big bull days and it had a prominent tail below. It therefore is not a strong sell signal bar.
- That makes sideways likely tomorrow.
- The bulls are still trying to break above the 10-week trading range. At some point, if they continue to fail, they will give up. That would create a reversal down.
- The odds still favor the bull breakout to another new all-time high.
End of day summary
- I will update at the end of the day.
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.