Emini follow-through selling in sell climax down to 2800
I will update again at the end of the day.
Pre-Open market analysis
The bears got follow-through selling yesterday. However, the bulls rallied off the 20 day EMA, the 2800 Big Round Number, and the March high. After 2 days of climactic selling down to support, the Emini will probably go sideways to up for a couple of days. The bears will likely then get a 2nd leg down. I have been saying that the bears would get a 50 – 100 point selloff over the next 2 weeks. They now have 50 points, and a 2nd leg down is likely after a bounce.
Today is the last day of the month. Therefore, monthly support and resistance can be important. The targets are the June high of 2796.00 and the March high of 2811.00. If the Emini is within 5 points of either in the final hour or two, it will probably get drawn to the magnet for a test.
Overnight Emini Globex trading
The Emini is up 7 points in the Globex session. It will therefore be an attempt at a major trend reversal up after yesterday’s late higher low. Major trend reversals have a 40% chance of leading to an opposite trend. More often, they lead to a trading range.
The 2 day selloff on the 60 minute chart was in a tight bear channel. But, it so far has formed a higher low. The bulls will try to retrace about half of the selloff today and tomorrow. However, since the 60 minute bear channel was tight, the odds are that the 1st reversal up will fail and lead to at least a test back down. Day traders expect a weak 1 – 3 day rally and then a test back down to yesterday’s low.
If the 2 day selloff turns out to be a resumption of the February bear trend, the selling can be relentless over the next week. This is unlikely. More likely, the Emini went up big last week and then down big for 2 days. This creates confusion, which usually means the Emini will be sideways for a few days. Tomorrow’s FOMC announcement is another reason for the Emini to begin to get neutral today.
Yesterday’s setups
Here are several reasonable stop entry setups from yesterday. I sometimes also show limit order entries and entries on the close of bars. 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 in a position at the moment, these entries would be logical times for him to enter.
EURUSD Forex bull breakout above triangle ahead of FOMC meeting
The EURUSD daily Forex chart is breaking above the bear trend line at the top of the 2 month triangle. Most breakout attempts fail, and there is other resistance above at the July 9 and June 14 highs.
Today so far is the 3rd consecutive bull trend day on the EURUSD daily Forex chart. If today closes near its high, it will be a breakout above the 2 month bear trend line. However, the chart is still in a trading range. The bulls need consecutive closes above the June 14 high before traders will conclude that a bull trend is underway.
Look back at all of the many legs up and down over the past 2 months. Each has failed, no matter how strong the bars were. My 80% rule says that 80% of trading range breakout attempts fail. All trading ranges eventually break into trends. However, most attempts fail. Consequently, while the past 3 days are good for the bulls, the rally is still more likely just a bull leg in the trading range than the start of a bull trend.
Because the chart has been at the apex of the triangle for the past week, a breakout attempt has been likely. Consequently, the bulls have a higher probability of success here. But, until there is a strong breakout above the June 14 high, the odds are that this 3 day rally will fail either around the July 9 high or the June 14 high.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has rallied 130 pips in a bull channel for 3 days. However, that is not especially strong. Furthermore, it is now at the top of a 3 week tight trading range. In addition, the uncertainty over tomorrow’s FOMC announcement will likely lead to hesitation today. Therefore, the 3 day rally will probably stall here and today will likely enter a trading range.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Here are several reasonable stop entry setups for today. I sometimes also show limit order entries and entries on the close of bars. 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 in a position at the moment, these entries would be logical times for him to enter.
The Emini rallied from a wedge bull flag on the open. However, yesterday was a strong bear day on the daily chart. As was likely, there were sellers above yesterday’s high. The Emini spent the 2nd half of the day in a weak bear channel.. After testing the open and the top of the lower trading range, it reversed up to test the high at the close. It is in the middle of the 2 day selloff. That makes it neutral ahead of Wednesday’s FOMC announcement.
See the weekly update for a discussion of the price action on the weekly candlestick 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.
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 Intraday Market Update page.
