4 Strength Trades Thursday | Crude Oil, Gold, E-mini & Euro Futures 05/18/16

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“People become really quite remarkable when they start
thinking that they can do things. When they believe in themselves they have the
first secret of success.”  – Norman
Vincent Peale

Notes for Tonight’s Newsletter:

We have
some aggressively bearish markets tonight; Crude Oil responded with strength
after the inventory report, the S&P looks a bit confused looking for traps,
while Gold and Euro are testing major support after monster moves lower
today… never a dull moment in the volatile futures markets!

E-mini
S&P is bearish as the sellers try to finish a re-test back to today’s lows
but a triangle on the chart tells us they might be waiting for a ‘trap’ above
the recent highs before they can get the job done tomorrow.  The buyers had control for most of the
session today before price collapsed all the way down to complete a rotation to
the ‘megaphone’ pattern low from earlier this week.  The bears have control of the market at this
time with a bear channel that tell us ‘swing sellers’ will be looking to
re-test the 2030.75 low tomorrow. 
Looking closely at the chart we can see that the prior swing at 2046.25
was never broken which means there are likely still ‘swing sellers’ waiting to
get into this move which explains the lack of follow-through this
afternoon.  Sellers will be looking for
opportunities above the prior swings or they need to wait for a
breakout-pullback below the triangle lows.

Gold
is bearish but an overshoot of the channel low tells the sellers to wait for a
bullish correction before they look for more reliable selling opportunities
tomorrow while the counter-trend buyers will have an opportunity after they can
hold a pullback off these lows.  The
bears had control for the entire session today which tells us to expect some
profit-taking at the end of the session today, however, we only see a single
overshoot of the channel low so there is a possibility that the sellers go for
a double-overshoot before we see a correction higher.  Buyers will be looking for that
double-overshoot followed by holding a pullback if they want to have the
confidence to buy on the way back up to the resistance levels overhead and we
know there will be sellers waiting at resistance levels to try and finish the
move down to the double-down and triple measured-move targets below.

Euro
is extremely bearish this evening with a completed measured-move and testing
the low of a pending bear channel which tells us to look for ‘bull traps’ above recent
swing-highs for the most reliable selling opportunities tomorrow.  The euro has been nothing short of chaotic
this week and today was no different with the sellers aggressively pushing
lower after a successful bear-flag completed the measured-move target and kept
going.  There isnt much to use on this
chart tonight, which tells us that other traders will most likely use similar
levels to make decisions tomorrow.  The
bear channel and spike & channel are both questionable but they are the
only information that we have to work with. 
We cant reliably sell with price this low, but with such aggression
going lower we assume that sellers will have pending orders above all the
previous swings trying to participate in this move and that is where we will
look for buyer-failures to sell it back down.