Trading “Four Legs Down”

We got strong moves in today’s session, with the E-Minis going four legs lower and Crude Oil attempting to finish its fourth leg higher in the overnight session…

But with all that strength in in one direction, we know that traders will be waiting for a better option than “chasing the market” higher or lower…

And in these circumstances, experience tells me there are four different scenarios I need to be prepared for on Wednesday – are you ready?

Crude Oil Tells Me to Wait for More Information

Crude Oil is bullish with a strong spike higher into the closing-bell, clearly telling us the bulls have control, but it’s far too high to start buying this late in the move…

Instead of chasing the move higher, I’m waiting to see which of four different set-ups we get in the overnight session to confirm timing of the entry.

E-Mini S&P Needs a Pullback

E-Mini S&P is bearish and four legs down in today’s session, closing right on the low of day, which tells me the bears have control, but we’re far too low to considering selling at this point.

Knowing this, I’d rather wait for a bounce higher, and look for failure set-up into the buyers stops when they try to predict the next reversal.

Nasdaq Runs Lower Into a Range

Nasdaq is bearish with its own four-legged move in today’s trading session, which again confirms the bears have control, but encourages us to wait patiently for a more reliable place to sell at a higher price on the chart.

Considering that, I’m looking for a ‘2-legged pullback’ off these lows before I start selling into the buyers’ stops using a failure set-up tomorrow morning.

Gold Wants to Trap Before the Run (Stay Patient!)

Gold is bearish in the short-term, but considering that we’re below today’s trading range, it’s only a matter of time before we get a run back to re-test the range highs.

The challenge, however, is the strength of this recent move lower, which reminds me to stay patient for the sellers to try again before looking for buying opportunities going back up into the range again on Wednesday morning.

Euro Wants to Rally, But There’s One Thing in Their Way

Euro is bearish, but just like Gold, it too is sitting just below the range this evening, which is a horrible place to be selling…

And knowing that the sellers got a strong run lower this afternoon, my plan is to wait for the sellers to try a second run lower before I find my entry going long back to the high of the range tomorrow morning.

“We must train from the inside out. Using our strengths to attack and nullify any weaknesses. It’s not about denying a weakness may exist but about denying its right to persist.”