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Emini bear bar should form on August monthly chart

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Trading Update: Monday August 2, 2021

Emini pre-open market analysis

Emini daily chart

  • First day of month. An Emini bear bar should form on August monthly chart.
  • Friday triggered micro double top sell signal. Also was expanding triangle. However, Thursday was a bull bar and therefore a weak sell signal bar, especially in strong bull trend.
  • High 1 buy signal but tail, 5-day tight trading range.
  • Sideways for 5 days in bull trend so odds favor at least slightly higher.
  • 5 sideways day increases chance of another sideways day today.
  • July closed near its high, so August should trade above July at some point.
  • After 6 consecutive bull bars on monthly chart, August should be bear bar, even if there is a new high early in the month.
  • Traders are deciding if streak will continue in August. Since that has not happened in more than 10 years, August should close below today’s open of the month.
  • Since August should have bear body, if there is a strong rally this week, it will probably be a bull trap and become the high for a few months.
  • Since August should have bear body and be the start of 2 – 3 month pullback, there is increased chance of bear days in August. However, there might be a rally in the 1st half of the month.

Emini 5-minute chart and what to expect today

  • Emini is up 19 points in the overnight Globex session.
  • Will probably gap above Friday’s high, but not above July high, which is all-time high.
  • Gap might be small. If so, small gaps usually close in 1st hour.
  • After 5 sideways days, increased chance of another sideways day.

Friday’s Emini setups

Emini buy climax and then trading range. An Emini bear bar should form on August monthly chart.

Here are several reasonable stop entry setups from Friday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. Buyers of both the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day (see Online Course/BTC Daily Setups).

My goal with these charts is to present an Always In perspective. If a trader was trying to be Always In or nearly Always In a position all day, and he was not currently in the market, these entries would be logical times for him to enter. These therefore are swing entries.

It is important to understand that most swing setups do not lead to swing trades. As soon as traders are disappointed, many exit. Those who exit prefer to get out with a small profit (scalp), but often have to exit with a small loss.

If the risk is too big for your account, you should wait for trades with less risk or trade an alternative market like the Micro Emini.

EURUSD Forex market trading strategies

EURUSD Forex daily chart

EURUSD Forex first leg up from wedge bottom
  • Friday was bear reversal bar and a failed breakout above the July 6 lower high.
  • Friday is sell signal bar for double top with July 6 high.
  • After consecutive wedge bottoms on July 21, odds favor 2nd leg sideways to up. Therefore, the bulls should buy a 1- to 3-day selloff. This should create a higher low and lead to 2nd leg sideways to up.
  • Even though sideways in tight range for a month, the trading range price action began with the June 25 lower high. Therefore, should reach that high before breaking far below July 21 low.

Summary of today’s S&P Emini futures price action and what to expect tomorrow

Emini trending trading range day with late bear breakout

End of day summary

  • Trading range open (triangle), then strong bear breakout below trading range, the 60 minute EMA, and the 4400 Big Round Number.
  • Reversed up from lower low major trend reversal, but continued in lower trading range. A bull leg in the lower trading range is always more likely than a reversal into a bull trend.
  • Late break below lower trading range in Trending Trading Range Day.
  • The breakout fell below yesterday’s low to form outside down day, but at bottom of tight trading range on daily chart so not strong sell signal bar for tomorrow.
  • On daily chart, 3rd reversal down from above July 14 high.
  • 7-day tight trading range in strong bull trend so odds continue to favor at least slightly higher prices.
  • Tight trading range might continue into Friday’s unemployment report.
  • Should go above July high since it was a bull bar closing near its high on the monthly chart.
  • However, August should close below open of the month (today’s open) and lead to a 2 to 3-month correction of at least 15%.

See the weekly update for a discussion of the price action on the weekly chart and for what to expect going into next week.

Trading Room

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 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.

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