5 Ways to Trade Friday | SchoolOfTrade Newsletter 01/19/17

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“If you are not willing to risk the unusual, you will have to settle for the ordinary.”

Crude Oil is range-bound and price is bullish as the buyers take price back inside the narrow range where price spent most of the day.

E-Mini S&P is bearish and trying to re-test the low after a big overshoot of the channel sent prices correcting higher to finish the session. 

Gold is bullish and trying to finish rotation back to the high of a megaphone this evening, which tells the buyers they have short-term opportunities to buy the next pullback.

Euro is bullish and trading at the measured-move this evening, which tells the buyers to look for a 2-legged pullback to a previous level of support, so they can ‘buy low’ for a target going back up to re-test the high.

FDAX is bearish and trading at the measured-move this evening, which tells the bears to be looking for selling-opportunities after a 2-legged correction off the low.

Crude Oil

Crude Oil is range-bound and price is bullish as the buyers take price back inside the narrow range where price spent most of the day.  Whenever I see a trading-range on the chart I know to buy the low, sell the high, avoid the middle, and focus on failures until I see a successful breakout-pullback to being a new trend.  The pendulum swing is certainly something to consider going forward.  The sellers just tried and failed to break out of the range, so we will be looking for buying opportunities as price goes back into the range, and possibly a move all the way back in the opposite direction tomorrow.

E-Mini S&P

E-Mini S&P is bearish and trying to re-test the low after a big overshoot of the channel sent prices correcting higher to finish the session.  The bears have control, but the rising support trend-line is clearly going to cause some trouble for the sellers, so they need to get below the trend-line before we can start thinking about selling this back down to the measured-move target below.   The buyers do have an opportunity here; with such a big overshoot of the channel low, we’re seeing this big correction give the buyers some momentum, but they need to hold this pullback and blow through the ‘battle zone’ before we can reliably buy this market going back to re-test the high.

Gold

Gold is bullish and trying to finish rotation back to the high of a megaphone this evening, which tells the buyers they have short-term opportunities to buy the next pullback, but don’t expect much because we assume sellers will be ready to enter the market at the highs to sell back down to the $1200 round number again tomorrow.  The bulls look very strong coming off the low, likely fueled by the sellers getting forced out of their positions when they failed to keep price below the $1200 round number.  With such strength going higher, we will expect buyers to be interested around the support trend-line, but beware buying the high.  Sellers will be wise to wait patiently for price to finish the move up to the high, and then beware selling into the rising support trend-line coming up from below.

Euro

Euro is bullish and trading at the measured-move this evening, which tells the buyers to look for a 2-legged pullback to a previous level of support, so they can ‘buy low’ for a target going back up to re-test the high.  The bulls have control after a strong push higher finished today’s session, but they reached their ‘objective’, which tells us to stay patient and wait for price to pull back to attract more buyers, or they need a successful breakout-pullback above the measured-move to give us proof the bulls are looking for a bigger move, possibly up to yesterday’s high.  Sellers should also stay patient, watching for the buyers to try twice to re-test the measured-move and selling into their failure if/when that time comes tomorrow, with a target back in the trading-range from earlier today.

FDAX

FDAX is bearish and trading at the measured-move this evening, which tells the bears to be looking for selling-opportunities after a 2-legged correction off the low, preferably up around the ‘battle zone’ tomorrow for a target going back to the lows.  The sellers look really strong to finish the session tomorrow, but they have three legs down and reached their short-term ‘objective’, telling us that we need to see price move higher to attract more sellers, or see some proof that the bears want to make a run down to the previous day’s low.