2 Ways to Trade this ‘Melt-Up’ Reversal

Can anything stop these melt-up markets?!

Both the Emini and Nasdaq continued to “melt” higher on low volume today, finishing the session at major resistance levels on the chart…

The bulls clearly have control — but these low volume moves, combined with multiple resistance levels tells me the “easy money” will be the sell side…

Selling?  Isn’t this too bullish?  Yes.  So we have to pick our spots wisely… I can’t force the trades short, so I’ll be looking for my (2) favorite reversals patterns to trigger the entry.  You don’t want to miss these on Wednesday…

And don’t forget Gold – sellers have control after a 2-try reversal off today’s high, and I have my eyes on some easy shorts off the high of a new bear channel…

E-Mini S&P (ES):

E-Mini Keys to Success:

• Buyers took control into a trading-range this morning and a late afternoon melt-up completed a measured-move going into all-time high resistance overhead.
• Buyers have control, but running into measured-move resistance isn’t a great place to buy, so it’s best to either wait for a pullback or look for a breakout going higher.
• Sellers should stay patient; wait for a 2-try failure off the highs or a 123-Reversal going lower.

Best Trades for Tomorrow: 

• UP – buy the 2-try trap (or) sell the 2-try failure
• DOWN – buy the seller failure (or) sell the 123-Reversal
• SIDEWAYS – wait for the new range, then buy support levels below it.

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

• Bulls took control into a trading-range and just complete a breakout into a measured-move resistance zone overhead.
• Buyers have control, but multiple resistance levels overhead tell us to wait for either a deep pullback off the highs, or a breakout to new highs before we can buy more.
• Sellers don’t have any momentum, but they have a great opportunity for shorts off the highs or reversals running back into the range from this morning.

Best Trades for Tomorrow: 

• UP – buy the bull breakout (or) sell the 2-try failure
• DOWN – buy the seller failure (or) sell the 123-Reversal

Gold Futures (GC):

Gold Keys to Success:

• Bulls sent price racing higher into a range to begin the day, but sellers took control and appear to be pushing towards a retest of yesterday’s low.
• Sellers have control and will be looking for shorts up at resistance levels overhead, along with selling breakouts going lower.
• Buyers need to be careful because they don’t have many options until we either bounce off the major lows, or get a strong 123-Reversal going higher.

Best Trades for Tomorrow: 

• UP – sell the buyer failure (or) buy the 123-Reversal
• DOWN – sell the 2-try trap (or) buy the seller failure off major lows.
• SIDEWAYS – sit on hands and wait for a pullback to sell at resistance levels above the range.