Waiting for Traps | Crude Oil, Gold, E-mini & Euro Futures 05/16/16

Click here to download today’s charts

“Success seems to be connected with action. Successful people
keep moving. They make mistakes but don’t quit.” 

Notes for Tonight’s Newsletter:

Crude
Oil is bullish and trying to finish rotation back to the highs of a ‘hidden
channel’ this evening but price is quite expensive up at the highs so we can
assume the wise bulls will be looking for a trap back at prior
swings or a strong breakout-pullback above 47.85 if they are going to buy this
market. 

E-mini
S&P is bullish with a spike & channel this evening which tells the
buyers to stay patient for the most reliable opportunities at prior levels of
support before a re-test of the highs tomorrow.  The bulls had control for the entire session
today, and on the first pullback to the moving-average we see buyers trying to
failing to keep the move going which is a clear sign that price is considered
too expensive for buyers and they will wait for a ‘trap’
at prior support levels below.  Sellers
may be able to find short-term opportunities during a measured-correction off
the highs but they need to be careful because the swing-buyers are going to be
hunting for a re-test of the highs and the triple measured-move overhead.

Gold
is bearish after collapsing off the highs earlier today but the way the buyers
appear to have bought the test of the lows gives us clues that this move lower
may be nothing more than a ‘trap’
to get the sellers chasing and the buyers a much cheaper price to buy going
into tomorrow’s session.  The buyers had
control for the first half of the session today and then appear to have lost interest
when it pulled-back to the moving average which allowed the sellers to send
price all the way back to the lows of the range.  Looking closely at the test of the lows you
can see there was no follow-through from the sellers which leads us to believe
that the buyers are interested once again at this lower price.  We assume sellers will try to sell the high
of the ‘hidden channel’ and that is where the buyers will be looking to enter
going back to the highs.  Sellers need to
see the buyers fail when we get back to the channel highs and the buyers want
to get above the channel highs and hold as support for confidence going back to
the 1290.4 highs.

Euro
is bullish in the short-term but the candlesticks don’t give us much confidence
that today’s move off the lows isn’t being sold as it goes higher by the
swing-sellers trying to get a better price after last week’s big move lower.  We can easily see a bull channel pushing
higher today, which would tell us to look for buying opportunities back to the
range-highs in the short-term, but looking at the candlesticks closely we see
that every move higher was sold. 
Furthermore, looking left you can see that sellers have been selling
just above each swing-high as well, giving us reason to believe the sellers are
scaling into the move higher and looking for a re-test of the lows.  The falling resistance trend-line overhead is
the big key for the buyers; they need to get and stay above that trend-line if
they have a chance to make a move up to the ‘double-up’ target overhead.  if the sellers hold this next pullback we can
then assume we will be targeting the lows again.