Emini and Forex Trading Update:
Thursday December 19, 2019
I will update again at the end of the day.
Pre-Open market analysis
The Emini traded in a tight trading range around the 3200 Big Round Number for the 3rd day yesterday. The chart is in Breakout Mode.
However, until there is a breakout, day traders will continue to look for reversals. Many of the best setups are with limit orders, which are only for professional traders. It is too easy to make costly mistakes with limit orders. Traders starting out should wait for stop order setups.
The bulls are trying to get the year and the decade to close on the high after both opened near their lows. Since the bull trend has been strong for several months, the Emini will probably have only minor pullbacks in the 2 remaining weeks of the decade.
Overnight Emini Globex trading
The Emini is down 3 points in the Globex session. Traders are still deciding whether the bull trend will resume or if there will be a 1 – 3 day pullback.
Until there is a clear breakout of the 3 day tight trading range, day traders will be quick to take profits. They will always look for a 4 point trade beginning in the 1st hour or two. After that, if there is a lot of trading range price action, like over the past 3 days, they will switch to scalping for 1 – 2 points.
Because the daily chart is at resistance, there is an increased chance of a trend up or down. Day traders want to see at least 2 consecutive big trend bars, and preferably more, and a breakout of the range before they will conclude that a trend is underway.
Yesterday’s setups
Here are several reasonable stop entry setups from yesterday. I show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. Buyers of the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day.
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.
EURUSD Forex market trading strategies
The daily chart of the EURUSD Forex market has been sideways for 6 days at resistance. It tested the 1.12 Big Round Number exactly to the pip. Also, it broke a little above the October high and twice above the 14 month bear trend line. However, it keeps pulling back from that resistance.
Traders are deciding if it will break above the resistance and rally to the next resistance level. That is the June high just above 1.14. The bears instead want a reversal down to a new low in the 2 year bear trend.
Because the EURUSD Forex market has also been in a trading range for 5 months, a continuation of the trading range price action is most likely. This is true even if the bulls get their breakout or the bears get a resumption of the bear trend.
There is no sign that the trading range price action is about to end. Until it does, traders will continue to look for reversals or at least pauses every 2 – 3 weeks.
Overnight EURUSD Forex trading
The 5 minute chart of the EURUSD Forex market tried to reverse yesterday’s selloff overnight. But the rally failed and the EURUSD is now back at yesterday’s low. The 35 pip selloff has been in a tight bear channel. Consequently, day traders have only been selling.
However, the EURUSD is now back to the bottom of its 6 day trading range. Additionally, the selloff has lacked consecutive big bear bars. Therefore, traders expect it to be a bear leg in what will become a trading range soon.
Until it begins to go sideways, day traders will continue to sell rallies. Unless there is a strong bear breakout, they will only scalp. Once it begins to go sideways, the bulls will begin to scalp reversals up from the bottom of the developing 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 show each buy entry with a green rectangle and each sell entry with a red rectangle. I rarely also show limit order entries and entries on the close of bars. Buyers of the Brooks Trading Course and Encyclopedia of Chart Patterns have access to a much more detailed explanation of the swing trades for each day.
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.
End of day summary
The Emini broke above its 3 day tight trading range and rallied in a Small Pullback Bull Trend today. There was some profit-taking late, but then a rally into the close. That late selloff in a buy climax increases the chance of some trading range price action tomorrow. But, the bulls will still try to get the year to close on its high.
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 Standard Time
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 Market Update page.
