October 12, 2016
- in Uncategorized by schooloftrade
Trading Range Strategy | SchoolOfTrade Newsletter 10/12/16
“The person who says something is ‘impossible’ should not interrupt the person who is doing the impossible.”
Notes for Tonight’s Newsletter:
We have a bunch of trading ranges to work with tonight, which makes our job pretty simple going into Thursday; Crude Oil is bearish and trading inside a range around the $50 level, the S&P and Gold are both coming off the highs of their ranges, and the Euro is trying to break free of its range on the way down to the round number of 10,000 tomorrow.
Crude Oil is bearish and trading inside a range this evening which tells us to be looking for selling opportunities using traps and failures at resistance levels above the range and avoid trying to sell the lows of the range unless we see a successful breakout-pullback tomorrow. Buyers need to stay patient and wait for either seller-failures at the low of the range or a strong breakout-pullback that can hold above the reversal line at 50.64.
E-mini S&P is trading sideways and trying to finish rotation back to the low of a trading range this evening. A trading range tells us the market is ‘balanced’ and will take a strong breakout in order to find a new direction, so in the meantime we’ll focus on failures to buy the lows, sell the highs, and avoid trading the middle until we see a successful breakout in one direction tomorrow.
Gold is range-bound and trying to finish rotation back down to the low of the range but it may try to complete the measured-move overhead before we get the opportunity tomorrow. Whenever we see a range our job is to buy low, sell high, avoid the middle, and focus on failures using the pendulum swing which tells the sellers to look for buyer-failures at the highs and buyers to look for seller-failures at the lows until we see a new trend develop tomorrow.
Euro is bearish and trading at the lows of a range this evening which tells the sellers to look for buyer-failures at the highs, buyers to look for seller-failures at the lows, and to avoid the middle of the range tomorrow. The round number of 10,000 may play a factor tomorrow, so if price pushes lower, don’t sell into support levels on the way down and watch for a range to develop around that area if/when they get there.
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