Are You Ready for the Breakout? (Fake-Out?)

Welcome back – charts are prepped and ready for Thursday…

We’ve been trading inside narrow ranges for most of the week, but I’m seeing lots of “rotational” clues this afternoon that suggest a breakout might be right around the corner…

Breakouts are tricky because most of them fail, no matter how convincing they look at first.  The key is waiting for the proper “proof” in momentum…

When you get the proof, you take the breakout.  But when you don’t, you look for the ‘fake-out breakout’ instead. 

It’s easier than it sounds, let me show you…

E-Mini S&P (ES):

E-Mini Keys to Success:

• Market still bullish into a trading-range. 
• Buy below the range using seller failure patterns at support levels
• Buy 123-breakout patterns on the first pullback

Best Trades for Tomorrow: 

• [UP] – 123-breakout to buy (or) crown reversal to sell
• [DOWN] – seller failure to buy (or) 123-Reversal to sell
• [SIDEWAYS] – sit on hands, wait for a breakout

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

• Bulls have control as they try to complete rotation back to the high of the weekly range.
• Buy the bull breakout using a 123-breakout or 2-try trap pattern
• Buy the pullback around the lows of the channel using failure patterns.

Best Trades for Tomorrow:

• [UP] – 123-breakout to buy (or) crown reversal to sell
• [DOWN] – seller failure to buy (or) 123-Reversal to sell
• [SIDEWAYS] – sit on hands, wait for a breakout

Gold Futures (GC):

Gold Keys to Success:

• Bullish into a triangle/range, telling us to focus on trading the “edges”
• Buy bull breakouts with 123-breakout patterns
• Buy pullbacks using seller failures around lows of the range.

Best Trades for Tomorrow:

• [UP] – 123-breakout to buy (or) crown reversal to sell
• [DOWN] – seller failure to buy (or) 123-Reversal to sell
• [SIDEWAYS] – sit on hands, wait for a breakout to buy low, sell high