Don’t Short This Bounce Until You Watch!
Welcome back — are you ready for Tuesday?
The Emini ES is in a perfect spot for a short off the bottom of today’s trading range, but the strength of this pullback gives buyers an easy opportunity to grab a reversal…
Nasdaq is in a similar situation – I’d love to short the highs of a major bear channel, but the strength of this recent bounce has me concerned this might be a short-squeeze in the making…
And don’t forget Gold – we’re sitting in the perfect spot to short the high of last week’s range, but a key support level is standing in my way first…
As you can see, there’s plenty of opportunity on Tuesday – just make sure you watch tonight’s video before you hit that sell button!
E-Mini S&P (ES):
E-Mini Keys to Success:
- Remember – big moves today often mean narrow ranges tomorrow.
- Sellers took control with a strong move lower into a range this morning.
- Shortly after lunch began, price ran lower to complete a measured-move before bouncing hard off the lows all the way back up into the low of the range.
- Sellers will be looking for another leg lower, using the range as key resistance and the measured-move as the next target to the downside.
- Buyers need to be careful because the low of this range is a classic resistance zone. They need to wait for another leg higher to confirm this bounce is truly a reversal.
Best Trades for Tomorrow:
- UP – buy the 2-try trap (or) sell the buyer failure
- DOWN – sell the buyer failure
E-Mini Nasdaq (NQ):
Nasdaq Keys to Success:
- Big move today often means a narrow range tomorrow
- Sellers took control with a strong run lower to complete a measured-move before they bounced off the lows back up to the 15,000 round number.
- Sellers have a lot of momentum right now, and will be looking for ways to get short back to the lows tomorrow morning
- Buyers have a great opportunity to take control, but they need another leg higher to confirm before we can find anything reliable on the buy-size.
Best Trades for Tomorrow:
- UP – sell the buyer failure (or) buy the 123-Reversal
- DOWN – sell the buyer failure
- SIDEWAYS – sit on hands and wait for a new range, then buy low sell high with failure setups.
Gold Futures (GC):
Gold Keys to Success:
- We continue to trade sideways after last Thursday’s big drop lower.
- Sellers would love to short these highs with a buyer failure, then look for additional shorts going back to the lows.
- Buyers need to stay patient until they see a 123-breakout pattern, then look for entries off new channel lows.
Best Trades for Tomorrow:
- UP – buy the 123-breakout (or) sell the buyer failure
- DOWN – sell the buyer failure & hidden channel pullback
