5 Trades for Friday | SchoolOfTrade Newsletter 12/08/16

Click here to download today’s charts

“Enter every activity without giving mental recognition to the possibility of defeat. Concentrate on your strengths, instead of your weaknesses… on your powers, instead of your problems.”

Crude Oil is bullish and trading at a measured-move and the high of a large bull channel this evening.

E-Mini S&P is bullish and trying to re-test today’s high and possibly complete a triple measured-move tomorrow.

Gold is bearish and trading in the middle of a range this evening.

Euro is bearish and trading at a measured-move with a spike & wedge.

FDAX is bullish and trading at the high of day after a beautiful pullback and re-test of the high.

Crude Oil is bullish and trading at a measured-move and the high of a large bull channel this evening, which tells the buyers to wait for a pullback to buy at a lower price tomorrow.  The bulls look very strong this evening, finishing the day right at the highs, which tells us that although we would love to buy the low of this channel, we may not get the chance, so our goal is to wait for pullbacks to support levels and then look for traps, failures, and pullbacks on the way back up to re-test the high.  Sellers on the other hand, need to wait patiently until we get some strength to the downside because any pullback at this point will be seen as a bargain buying opportunity tomorrow.

E-Mini S&P is bullish and trying to re-test today’s high and possibly complete a triple measured-move tomorrow.  The S&P continues to push higher this week and our plan continues to remain the same; avoid buying the highs, look for traps and failures on the corrections off the highs and pullbacks on the way back up to re-test the highs.  Sellers need to continue to be careful right now, this market is blindly-bullish and continues to defy the conventional definition of ‘over bought’ so stick to buying until we see a strong, continued move lower, because anything else will likely be seen as a buying opportunity for people who weren’t able to participate in this move today.

Gold is bearish and trading in the middle of a range this evening, and after seeing the buyers fail to break out of the range earlier this morning, that tells us that buyers are rejecting higher prices and need to see lower prices before they re-enter this market tomorrow.  Our plan for trading with a range is always the same; buy the low, sell the high, avoid the middle, and focus on failures.  The best buying opportunities will come at the low of the range or after a successful breakout-pullback above the high of the range.  Sellers on the other hand, have a difficult job right now because they sold the highs earlier today, and they don’t want to trade the middle of the range at this point, so they need to stay patient and look for buyer-failures at the highs for another opportunity to sell the highs again tomorrow.

Euro is bearish and trading at a measured-move with a spike & wedge this evening, which tells the sellers that although this move was extremely strong, the most reliable selling-opportunities will come up resistance levels overhead.  Sellers will be waiting patiently to use traps and failures at resistance levels and then grab pullbacks on the way back down to re-test the lows.  Buyers on the other hand, may get a big opportunity tomorrow because today’s move came in the wake of the ECB Announcement this morning and we know that those announcements often produce big head fakes the following day, so buyers want to wait for the sellers to fail at the resistance levels overhead and then look for strength to confirm the move higher and grab a pullback for what may be a very large move back to the highs.

FDAX is bullish and trading at the high of day after a beautiful pullback and re-test of the high.  The buyers have control, and after a strong move higher today they will be looking for buying opportunities after a successful breakout-pullback to new highs, or a correction back into the ‘battle zone’ tomorrow.  One thing to keep an eye on is a potential spike & channel, which will be confirmed if we see price push higher and respect the resistance trend-line overhead, and if that is confirmed, then our focus will be to buy the low of that channel on the way up to a measured-move tomorrow.