8 Ways to Trade Wednesday | SchoolOfTrade Newsletter 01/10/17

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“If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception; it is a prevailing attitude.”

Crude Oil is bearish and trading at the low of a channel this evening as sellers wait for a correction to sell more tomorrow.

E-Mini S&P is bearish and trying to re-test today’s lows after the buyers failed to hold a late-session rally.

Gold is bullish, but trading into a measured-move tells the buyers to avoid ‘buying high’ and wait for a move back to the lows.

Euro is bearish and trading near the low of a channel and possible wedge this evening, telling sellers to focus on selling the highs tomorrow.

FDAX is range-bound and trading in the middle of a triangle this evening, telling both sides to stay patient.

Crude Oil

Crude Oil is bearish and trading at the low of a channel this evening, which tells me to look for selling-opportunities up at the high of the channel or after a successful breakout-pullback below the channel low with a target going down to the measured-move tomorrow.  The sellers clearly have control, but we don’t want to sell the low of the channel, so our best option is to stay patient and wait for more information tomorrow.  Buyers need to be careful tomorrow because any move up off the lows will likely be seen as a selling-opportunity, so the only time we can reliably buy tomorrow will be after we see considerable strength going higher.

E-Mini S&P

E-Mini S&P is bearish and trying to re-test today’s lows after the buyers failed to hold a late-session rally.  The bears have control, holding the low of a failed bull channel, and now we’re ultimately waiting to see if this strong move off the highs is going to develop into a spike & channel or just a channel as the bears try to finish the move down to the lows.  As a seller, I’m watching the overhead resistance levels and looking for traps and failures to ‘sell high’ on the way back down, and will avoid ‘selling low’ ahead of the measured-move.  Buyers may get another shot at this; after such a wild finish to the session, we may get a strong break higher, and all the buyers need to do is hold above the resistance trend-line for a chance to buy back up to the highs tomorrow.

Gold

Gold is bullish, trading in the middle of a channel, and at the measured-move this evening which tells the buyers to avoid ‘buying high’ and wait for more reliable trading opportunities either at the low of channel or after a successful breakout-pullback above the prior month high.  Keep an eye on a possible triangle developing with the falling resistance trend-line and the low of the bull channel, and remember this channel is wide and flat enough to allow both sides of the market to participate, so make sure you focus on buying low and selling high with the proper entry trigger.

Euro

Euro is bearish and trading near the low of a channel and possible wedge this evening, which tells the sellers to be patient and look for opportunities to sell up at resistance levels overhead, rather than trying to sell at the low.  The bears have control after giving the buyers multiple opportunities to take price higher, and now the bears will try to finish the measured-move, and our plan tomorrow will be to look for selling-opportunities up near the highs of the channel, and if they complete the measured-move, then we look for traps above prior swings.

FDAX

FDAX is range-bound and trading in the middle of a triangle this evening which means the most reliable trading opportunities will come selling the highs and buying the lows tomorrow.  Buyers and sellers wrestled back and forth today, neither side able to take control and we’re sitting right in the middle as we finish the day.  Tomorrow’s plan will be to look for seller-failures at the lows, buyer-failures at the highs and avoid the middle until we get a strong enough breakout that can hold a pullback and keep going in a new direction tomorrow.