Don’t Chase this Reversal (Wait for This!)

Welcome back to the action – did you see that move today!?

The Eminis are both bullish after a miraculous reversal off today’s low – sellers appear to be ‘trapped’ with nowhere to run, which means there’s ONE special setup I don’t wanna miss…

Crude Oil is bearish, but look closely and you’ll see we’re sitting at major support levels below multiple ranges – ranges act like magnets, so I’m looking for ways to trap in sellers and ride the pendulum-swing higher…

And don’t forget – we have Jerome Powell’s testimony tomorrow morning so we need to “trade around” that news.  Let me show you how…

E-Mini S&P (ES):

E-Mini Keys to Success:

The Emini ES is bullish after a remarkable reversal off today’s massive selloff to start the week.

Bulls have a LOT of momentum behind this move, so you’d expect buyers to be looking for buying opportunities at support levels below us, or trap entries ahead of the measured-move objective overhead.

Sellers need to wait patiently for a turn in momentum – even the deepest of pullbacks will likely be seen as a buying opportunity right now, so it’s best to wait for a 123-Reversal as confirmation.

Side Note – Whenever see a BIG move in ONE day like we saw today, we expect the following day to be more range-bound and sideways.  Keep your eyes open for a range-bound market on Tuesday.

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

Just like the Emini ES, the Nasdaq began the day with a strong move lower, but a remarkable reversal now gives buyers control with a ton of momentum running back into the range from late last week.

With buyers in control, the best entries will be getting long after a deep pullback to channel lows, or look for trap setups before we reach the measured-move target overhead.

Sellers need to be careful – the amount of strength going higher will make this market difficult to short, so wait for proof from a 123-Reversal pattern and sell the first test of the new channel.

Crude Oil Futures (CL):

Crude Oil Keys to Success:

Unlike the Eminis, Crude Oil spent most of the day trading back and forth inside a range.

Ranges act like price-magnets, so the strategy is to “buy low, sell high” around the edges of the range – but look closely…

We expect momentum to build for the buyers if price continues this move higher off the lows, which will make it difficult to sell at resistance levels above the range, and give buyers a big opportunity to grab a slingshot-breakout going higher.

Buyers will be looking for opportunities to buy the breakout going higher, or buy the bounce off the range lows.

Sellers need to be careful right now – it’s going to require signs of exhaustion (2-Try Rule) if they want to sell up at the highs, or proof of a breakout to new lows.