Friday’s Trading Strategy | Crude Oil, Gold, E-mini & Euro Futures 07/07/16

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“Successful and unsuccessful people do not vary
greatly in their abilities. They vary in their desires to reach their
potential.” 

Notes for Tonight’s Newsletter:

Markets
are once again giving us excellent
opportunities ahead of tomorrow’s Non-Farm-Friday session; Crude Oil and Euro
are bearish while the S&P and Gold are bullish ahead of the major
news at 8:30am EST tomorrow.

Crude Oil is bearish
after today’s inventory report sent prices back to new monthly lows but the
bulls will be waiting for their chance tomorrow; The day started with the bulls in
control until the Inventory Report sent prices tumbling to new monthly lows
shortly after 11am EST.  The market is
clearly bearish this evening with a strong move down to complete the double-down
target at $45 with a pending bear channel and triangle to work with
tomorrow.  The most important thing to
remember tomorrow will be that the sellers have control and we cannot start
thinking about buying until we see the bulls hold a pullback after a new
higher-high.  We have to assume that
swing-sellers will be waiting above all the resistance levels above with the
goal of going back to the lows again tomorrow and possibly down to the triple
measured-move around $44.  If price
rises, the sellers will look for buyer-failures to sell back to the lows.  If price pushes lower the bears need to be
careful not to ‘sell low’ and wait for proof that buyers aren’t waiting at the
lows for an easy trap to send prices higher. 
The bulls need to get a successful breakout-pullback, and if they can
hold, they have wide open space back to the battle zone just below $47.

E-mini S&P is
bullish on the way to testing a spike & channel correction zone but the
bears will be watching closely to see if they fail for a re-test of the lows; Today’s session started with the
bulls in control but soon followed Crude Oil lower in the wake of the inventory
report at 11am EST.  We have a bear spike
& channel and a pending bear channel on the chart this evening that tell
the sellers to look for opportunities up at the correction zone which also
lines-up with the high of the pending bear channel.  In the short-term we can see a strong move
higher from the buyers which tells us to expect a reliable pullback to the
moving-average for another leg higher at the beginning of tomorrow’s
session.  The buyers will be looking for
the next pullback for an opportunity on the way up to the correction zone
overhead and then they need to wait for a successful breakout-pullback above
the correction zone for the next move back to the round number at 2100.  Meanwhile, the sellers will be waiting for
the buyers to fail.  The strength of this
move doesn’t sit well for the sellers so they need to be patient and wait for
the pullback to fail and then get in on the next move back to the lows if
possible tomorrow.

Gold is bullish but
struggling to keep control and the sellers are waiting patiently to re-test the
lows if they fail;
The sellers had control for the entire session today but fell just short of the
double-down target at 1350.7 which will be a target if the buyers can’t hold
this pullback tomorrow.  The strength of
the move lower today tells us that swing-sellers have been scaling-into their
positions as this price pulls-back into the correction zone at 62.5.  The recent move from the bulls was quite
strong, and as-expected they bought the first pullback with a target to new
highs but they struggled to keep it going which is now giving the sellers the
window they need to take price back to the lows if the buyers can’t finish the
job with a new higher-high that hold above 1364.4.  With Non-Farm payrolls due out tomorrow
morning we may see this market trade sideways which gives the bulls another
shot below 59.1 and the sellers will be waiting to see if they fail for a
target down at 52.0 and 50.7.

Euro is bearish and
trading at the lows of the channel this evening which means sellers need to
stay patient for a higher price to sell; The bears had control for the entire session today but
failed to complete the measured-move in a low-volume session ahead of
tomorrow’s Non-Farm Payroll Report. 
Trading at the low of the bear channel makes it hard for sellers to find
a reliable opportunity until we get a move back to resistance levels overhead
which also gives the bulls a small window of opportunity to find a scalp back
to the highs of the channel.  The bulls
need to see a move back above the moving-average and then hold the pullback on
the way back to channel highs where we assume the sellers will be waiting to
sell it back down.  If price can push
through the battle zone above 11159 then the buyers can look again for a
breakout-pullback for a test of the highs, but they need to watch carefully
because the sellers will be waiting to finish off the measured-move on the way
back to the lows.