Trading a Head Fake – Don’t Let This Fool You!

Heading into Thursday’s trading session, we have a bunch of potential “head fakes” on the charts tonight…

How? We began the day with strong moves lower, but the afternoon session saw prices rise higher with higher-highs and higher-lows.  Don’t let those fool you…

Sellers still have control of this momentum, so I’m hoping we see buyers think these “head fakes” are legit so we can sell into their stops for another leg lower…

Where’s the best entry?  What if it still goes higher?  Not to worry, I’ll cover all the details in tonight’s video.  Let’s get started…

E-Mini S&P (ES):

E-Mini Keys to Success:

• The Emini was sloppy price-action today, finishing the session inside a triangle range, telling us to use the range as a magnet – buying low and selling high with failures.
• Buyers will be looking for seller failures to get long off the lows, or bull breakouts to buy new highs.
• Sellers will be looking for buyer failures to short the highs of the range, or selling bear breakouts to new lows.

Top 3 Trades for Tomorrow: 

• UP – sell the buyer failure (or) buy the bull breakout
• DOWN – buy the seller failure (or) sell the bear breakout
• SIDEWAYS – sit on hands to avoid the middle of the range.

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

• We began the day in a range, then spiked lower into another range, and now buyers appear to be struggling to complete a breakout higher, giving sellers a great opportunity to catch a retest of the lows.
• Buyers will be looking for a short-squeeze going back to retest major highs, while sellers will be looking for shorts going back to the lows and bear breakouts to new lows tomorrow morning.

Top 3 Trades for Tomorrow: 

• UP – buy the bull breakout (or) sell the buyer failure
• DOWN – sell the buyer failure & sell the bear breakout

Gold Futures (GC):

Gold Keys to Success:

• We began inside the range from yesterday but sellers got the trap short they needed and sent price racing lower.
• Price has pulled-back to the bottom of the prior range, and we expect sellers to try sending it lower for a measured-move target.
• Sellers will be looking for shorts going back to the lows and breakouts going to new lows.
• Buyers can look for longs off the open-loop low, or wait for a pendulum-swing reversal going higher on strength.

Top 3 Trades for Tomorrow: 

• UP – sell the buyer failure (or) buy the bull reversal
• DOWN – sell the buyer failure & sell the bear breakout