Know a Pullback from a Reversal

How do you know the difference between a pullback and a reversal?  It all boils down to how the price-action reacts to the moving average.

Crude Oil is bearish and trading at the low of a range, which means I need to wait for the next attempt to fail before getting long up off the lows.

E-Mini S&P is bullish and giving us easy clues that this move off the high is just a pullback, not a reversal, and now all we need is to time the entry properly.

Nasdaq is bullish with a ‘2-legged pullback’ off the high, which tells me to keep my eye on a key resistance trend-line to be used as support for the best entry long tomorrow morning.

Gold is bullish but sitting in the middle of the range, which means I have to be careful planning the correct entry for tomorrow morning.

Euro is bullish with a nice strong run higher today, which means I’m looking to buy pullbacks, and I have my eye on a combination of two major support levels tomorrow morning.

Crude Oil is trying to catch us chasing…

Crude Oil is bearish with a trading-range, wide bull channel, resistance trend-line, and a measured-move on the chart tonight.

The long-term momentum may be bullish, but the short-term momentum is clearly bearish with this strong ‘2-legged pullback’ off the highs.

And when you combine this strong move lower, with the low of this trading-range, it tells us to wait for the sellers to finish their second leg and they I can start looking for buying opportunities using support levels, such as this resistance trend-line.

E-Mini S&P is still showing signs of bullishness…

E-Mini S&P is bullish with a trading-range, hidden channel, resistance trend-line, and measured-move.

The momentum is bullish because even with this strong move lower it’s easy to see the price-action has a difficult time getting too far away from the moving-average, which is a clear give-away that this is a pullback and not a reversal.

Knowing this, I want to look for buying opportunities using support levels, which would be the low of this big channel and hopefully using this resistance trend-line as key support on the opposite side.

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E-Mini Nasdaq is starting to turn range-bound…

E-Mini Nasdaq is bullish with a potential trading-range, hidden channel and measured-move on the chart tonight.

The bull momentum tells me to look for buying opportunities off major support levels, and I like the combination of this measured-move, channel low, and prior swing-low as a level of interest.

The big challenge is this resistance trend-line I see coming down overhead.

When I see a deep ‘2-legged pullback’ like this, I want to wait for the completion of the second leg lower, then try and use that trend-line as support on the opposite side.

Gold Day is Stuck in the Middle of a Range…

Gold is bullish with a trading-range, hidden channel, and measured-move on the chart tonight.

The trading-range is a big clue for me tonight because it’s easy to see that we’re sitting right in the middle third of the range, and I know that the middle is always going to be the most challenging.

Another important clue is the strength of this pullback off the high.

Yes, the overall momentum is bullish, but this short-term momentum is clearly bearish and I need to wait for these sellers to at least attempt another leg lower before I start looking for buying opportunities tomorrow morning.

We basically have two scenarios to plan for – the continuation down to the low of the channel, and the short-term failure for the sellers and a rally up to re-test the range highs.

If we get the continuation down to the low of the range, then I want to look for the 2-Try seller-failure pattern to buy off the lows.

But if we push higher, then I need to wait for the bears to try and sell the move higher before looking at buying the pullback to the low of a new minor channel.

Euro Day is Setting-up for a Pullback…

Euro is bullish with a strong run higher, hidden channel, reversal-line, and potential measured-move.

The strong run higher gives the bulls the momentum and tells me to look for buying opportunities at support levels waiting below.

The low of this channel, combined with the reversal-line makes for an excellent support level, so I want to stay patient for a pullback.

If we get the pullback, my goal is to buy into seller-failures and use the measured-move as the runner target overhead.