Avoid the Fake-Out Breakout with This Simple Strategy
Can the Emini S&P and Nasdaq continue this record-breaking run? Can Oil finally hold this bullish reversal? Can Gold breakout of the weekly range?
No matter which market you’re trading tomorrow morning, sideways ranges have played a major role in our trading this week, which means we need to have a plan for trading breakouts on Thursday morning…
Because whenever there are breakouts, there will be head-fakes and failures, with plenty of opportunity for a patient trader to take advantage, but only if you have the right plan of attack – are you ready?
Oil Waits to Confirm the Range…
Crude Oil is bullish and trading up at today’s high, which isn’t a reliable place to start buying, so I’m going to wait for either a breakout or a pullback tomorrow morning…
If I get the breakout, I’m looking for a 2-Try Trap entry going long, and if we get the pullback, then I start looking for seller-failures below the moving-average.
E-Mini S&P Needs to Prove Itself…
E-Mini S&P is bullish and testing the high of a spike & channel, just a few points above today’s trading-range, which is considered major resistance…
So instead of trying to predict this breakout, I’m going to wait and see if the buyers can hold the next pullback and look for entry off the low of a new channel…
But if we get the pullback off these highs, then I’m looking for a seller-failure pattern to buy off the low of this spike & channel.
Nasdaq Bull Wedge is Big Clue…
Nasdaq is bullish with a wedge that’s getting narrower with every new candlestick, which tells me to expect a deep pullback off these highs for a reliable buy going back to re-test the high…
But how far will the Nasdaq pull back? Because a shallow pullback will be trader differently than a deeper pullback, and I want to make sure you’re ready.
Gold Trades Sideways in a Range…
Gold is bearish and stuck in the middle of a trading-range and expanding triangle pattern, which tells me to buy low, sell high, and focus on breakout failures…
And since the bears have control, I’m focused on fading the bull breakouts with failure patterns, and buying the bear breakouts with nested failure patterns.
