Emini weak buy signal yesterday and back above April high
I will update again at the end of the day
Pre-Open market analysis
The Emini rallied in a trending trading range day yesterday. It was the 2nd day in a bull flag on the daily chart. The odds are that the daily chart will go above Monday’s high within a few days. The bears will try to get a micro double top or wedge top at that point. Until then, the downside risk is small.
Tomorrow is Friday so weekly support and resistance are becoming important. The bulls want the bar on the weekly chart to have a bull body. That would create consecutive bull bars on the weekly chart, which is a sign of strength. They therefore want Friday’s close to be above Monday’s open. The bears want the opposite (a bear bar on the weekly chart). This fight will be important at the end the day tomorrow.
Overnight Emini Globex trading
The Emini is down 5 points in the Globex market. Since the 5 minute chart has spent most of the past 5 days in trading ranges, that is likely again today. While the bears want a big bear trend day, the 2 week rally is strong enough to make that unlikely without at least a micro double top. The odds are that today and tomorrow will be mostly sideways. But, the bulls will probably get a rally above Monday’s high within a week.
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.
EURUSD daily Forex chart has consecutive sell climaxes and is transitioning into trading range
The EURUSD daily Forex chart broke strongly below a 3 day bear flag. The breakout is climactic. Since the bear trend is a parabolic wedge sell climax, the chart now has consecutive sell climaxes. This is typically the start of a trading range.
The EURUSD daily Forex chart has a strong 2 day break below a 3 day bear flag. The breakout is strong enough so that the bears might get a small 2nd leg down. However, it is climactic and it comes after a parabolic wedge sell climax. Furthermore, is it near support. Consequently, the chart is probably transitioning into a trading range.
The approximate top of the range will be around the May 14 high at around 1.20. The bottom of the range will be between yesterday’s low and just below the December 12 bottom of the 2 month parabolic bull channel. Therefore, the range will be about 300 pips tall (about 1.17 to 1.20). A trading range has several legs up and down and lasts at least 20 bars. That means at least a month, but it will probably last longer.
Overnight EURUSD Forex trading
The EURUSD 5 minute Forex chart has been in a 50 pip trading range overnight. The week is an outside down on the weekly chart. This means it traded above and then below last week’s range. The bears want the week to close below last week’s range, which means below 1.1822.
However, the past 2 days have rallied several times above that low. It is therefore an important magnet, and the 5 minute chart will probably stay around it until the week closes tomorrow afternoon.
Since the daily chart has an exhaustion pattern, the odds are against a strong bear trend today. In addition, this week’s selloff was strong. Therefore a strong bull trend is also unlikely. The odds are that today will be a trading range day around 1.18.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
After a parabolic wedge rally on the open, the Emini reversed down and formed a bear reversal day. The bears could not break below yesterday’s low, and the Emini rallied at the end of the day.
Today was a bear reversal day and then a smaller bull reversal day. After reversing down from above yesterday’s high, the Emini reversed back up exactly at yesterday’s low. The bulls therefore prevented the day from being an outside down day. Because it closed near the open, it was a doji candle stick on the daily chart.
Today was the 3rd day in a bull flag. The bears want a trend reversal down, but need consecutive big bear bars. The odds favor higher prices, even if the pullback lasts a few more days.
Tomorrow is Friday and the open of the week is a magnet. The bulls want the week to close above the open.
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.
