Russell Reverses + Crude Oil Drops = 150 Ticks Scalping

Crude Oil futures are trading sideways market at 73.50, which is slightly off the lows of 71.00 from yesterday.

Gold futures are trading sideways market at 1240, just off the high of the week, and all time highs of 1245.0

Euro futures are trading completely sideways at 1.2715, which is basically where we’ve been trading all week.

Russell Futures are trading in a sideways market at the big round number of 600.0, and interestingly we are now trading back above the head and shoulders candlestick pattern.

845am EST

Crude Oil Futures:

– 34-range chart shows sideways markets from 73.75 down to 72.69

– Our faster timeframes show wedge patterns and we are trading at the highs of the wedge, so we are looking to sell those highs around 73.75.

– We can see support levels on crude oil at 73.40, which is right in the middle of the wedge pattern, which means we really need to stay focused on the highs and the lows, and avoiding the middle of the bracket.

Gold Futures:

Our 34-range chart shows a well defined sideways trading range and bullish channel pattern.

We are not at the highs or the lows of the channel pattern, so my main focus on gold is the sideways range.

After further analysis of the sideways range, we can easily see the market has gone into ‘protection’ mode, which means the market participants are looking to protect their positions by entering the market in the middle of the range.

I can confirm this assumption with the following:

– Candlestick patterns at the highs and lows confirm sentiment

– Volume at the middle is greater than volume at the edges (extremes)

– Flat trigger line in the middle

– All of this tells us that a breakout without higher volume will be very suspect of a fake-out.

– Watch the volume, and if the volume is higher at the breakout take the trade!

– If the volume is lower at the breakout, consider this a fake-out breakout and watch for the 3 signs of price reversal

o Slowing speed
o Momentum curls
o Big buyers/sellers against your position