Tuesday’s Trading Strategy | SchoolOfTrade Newsletter 01/09/17

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“Excellence is an art won by training and habituation. We do not act rightly because we have virtue or excellence, but we rather have those because we have acted rightly. We are what we repeatedly do. Excellence, then, is not an act but a habit.”

Crude Oil is bearish with a spike & channel and sellers are waiting for the opportunity to ‘sell high’ tomorrow.

E-Mini S&P is bearish with a spike & range, which has sellers looking to sell the high of the range tomorrow.

Gold is bullish and trading at the low of a bull channel, which tells the buyers to be looking for opportunities for rotation back to the high.

Euro is bullish at the high of its range this evening and buyers are waiting to see if they can clear through he measured-move or if they need to wait for a correction tomorrow.

FDAX is bearish and trading inside the ‘correction zone’ of a spike & channel, which would normally tell us to sell, but we need to get below a rising support trend-line first.

Crude Oil

Crude Oil is bearish with a spike & channel this evening after a strong run lower in today’s session.  Today’s session was bearish from open to close, which tells us that most traders will always be ‘short’ this market and in need to take profit, which is where the next selling-opportunities will occur.  My plan for tomorrow is to look for price to correct off these lows and look for counter-trend buyers to try and fail to reverse the trend.  The challenge tomorrow will be staying patient; when a day moves this much in one direction it typically starts trading sideways the following day, and we will be looking for those opportunities to ‘sell high’ when price tries to reverse directions.

E-Mini S&P

E-Mini S&P is bearish with a spike & range this evening, which tells us to look for selling-opportunities at the high of the range or after a successful breakout-pullback below the range low.  The big clue this evening is the fact that the bears haven’t been able to continue the move lower since much earlier in the day, telling us that sellers don’t see value in selling this low, and reminding us to stay patient for higher prices, or the PROOF we need to sell the next break lower.  One thing to keep in mind for tomorrow; if we do get the break lower, be careful not to ‘chase’ the move because we have the Double-Down and measured-move support levels just below us, so stick to ‘traps’ if we get a strong push lower and avoid selling into the ‘no trade zone’ starting at 60.25.

Gold

Gold is bullish and trading at the low of a bull channel this evening which tells the buyers to be looking for opportunities to ‘buy low’, with a target going back up to re-test the high tomorrow.  One big clue on this chart is the sharp sell-off as price came tumbling back to the low of the channel.  Whenever we see a strong move in one direction, we expect people to chase the move, so we will look for a potential ‘second leg’ going lower, into the ‘battle zone’ at 79.3, where we will then look for the turn going back up to re-test the high tomorrow.  Sellers should be watching the next leg closely, because another strong move lower will most likely keep the buyers from re-entering this market and will give way to the sellers taking control tomorrow if they can hold below the ‘battle zone’.

Euro

Euro is bullish, trading into multiple resistance levels, at the high of its range this evening.  The bulls have control, but with the measured-move resistance in the way, it’s hard to get excited about buying right now unless price moves either higher or lower.  The ideal scenario would be a successful breakout-pullback above the measured-move, or a rotation back to the low of the range, where buyers can look for a seller-failure to ‘buy low’ tomorrow.  Keep in mind, the buyers may wait for a deep pullback before they commit to this market again tomorrow, so sellers need to beware trying to call a top until they see a strong move lower and a successful breakout-pullback below the measured-move.

FDAX

FDAX is bearish and trading inside the ‘correction zone’ of a spike & channel this evening.  The sellers will be looking to sell this price back to the lows, and possibly a measured-move, but the rising support trend-line is standing in the way, which tells me to look for selling-opportunities below the trend-line or look for a better entry at a higher price tomorrow.  Whenever I see a rising support trend-line like this, I also want to think about sellers failing and the possibility for buyers to grab control if they get a strong move and a successful breakout-pullback above the high of the correction zone tomorrow for a move going back to re-test today’s high.