Emini buy signal bar on daily chart at 2600 Big Round Number
I will update again at the end of the day
Pre-Open market analysis
Yesterday reversed up from below last week’s low and the 2600 Big Round Number. It is a buy signal bar for today. Furthermore, it is a High 2 bull flag with the April 25 low on the daily chart, and a smaller High 2 buy setup with Tuesday’s low.
The bears should not have allowed yesterday to reverse up from support. In addition, they should not have allowed it to close near its high. As a result, the odds are against a strong bear day today.
More likely, there will be at least some follow-through buying. Consequently, today will probably be either a trading range day or a bull trend day. If it is a strong bull trend day, the monthly bull trend is probably resuming. That could result in a series of bull trend days.
Overnight Emini Globex trading
The Emini is down 11 points in the Globex market. It did not trend up or down on today’s unemployment report.
Yesterday is a strong buy signal bar on the daily chart. Hence, the bulls will try to trigger the buy signal by going above yesterday’s high. They would like to create a strong bull trend day today because today would then be a strong entry bar on the daily chart. Therefore, there is an increased chance of a bull trend day today.
The reaction to the unemployment report is disappointing for the bulls. Hence, a trading range day is more likely than a bull trend day.
The bears have less need of a bear trend day. All they have to do is prevent the bulls from getting a strong bull trend. At a minimum, they would like the week to close below last week’s low of 2611.25. If the Emini is less than 5 points above that in the last hour, it will probably test down to it before the close. Then, traders will decide whether the week closes above or below it.
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 Sell climax almost down to support
The EURUSD daily Forex chart is in a strong bear trend. Since there are 3 brief legs down, the selloff is a parabolic wedge sell climax. In addition, it is near the support of the January 9 low.
The EURUSD 5 minute Forex chart briefly bounced on today’s Unemployment Report. Yet, it could not get above yesterday’s high. The odds are that it will trade below yesterday’s low today or tomorrow. Since the daily chart is in a parabolic wedge sell climax and there is support just below yesterday’s low, day traders will begin to look for a strong reversal up on the 5 minute chart within the next few days.
The daily chart is in a strong bear trend. Most days are strong bear days. However, there is a 60% chance of a bear rally starting within a week. Day traders will continue to sell rallies on the 5 minute chart. But, they will look for a strong reversal up soon. They will then look for 30 – 50 pip day trades from the long side.
The bears will continue to sell for swing trades and scalps until the daily chart reverses into a bullr trend. That is unlikely for at least a couple of weeks.
Overnight EURUSD Forex trading
The EURUSD daily Forex chart had a bull inside day yesterday in a strong bear trend. This is a weak Low 1 bear flag. Furthermore, there is support just below at the January 9 low of 1.1915 and at the 1.1900 Big Round Number.
As strong as the selloff is, the odds favor buyers around that support. The bears will buy to take partial profits and the bulls will begin to buy. Both expect about a 150 pip bounce to around the 20 day EMA over the next couple of weeks. This will be a test of the March 1 low of 1.2153, which is the breakout point.
A sell climax in a tight bear channel has only a 20% chance of a major trend reversal without at least a micro double bottom. If the chart sells to below yesterday’s low and reverses up, it will have a micro double bottom.
Even then, there is a 70% chance that even a strong rally over the next 2 weeks will be minor. Consequently, the bulls will sell to take quick profits and the bears will sell again. The odds are therefore that the rally would lead to at least a test back down to 1.1900, or a continuation of the bear trend.
Summary of today’s S&P Emini futures price action and what to expect tomorrow
Today was a Small Pullback Bull Trend Day. There was some profit-taking in the final hour.
Today was a big bull trend day. By going above yesterday’s high, the Emini triggered a buy signal on the daily chart. If the bulls get follow-through buying next week, the odds will be that the bull trend on the monthly chart is resuming.
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.
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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.
