Don’t Short this Drop Until You Watch!

Welcome back – let’s get to work!

Markets didn’t waste any time getting back in the groove today – both the Emini and Nasdaq collapsed running lower, while Crude Oil continues to climb…

The Emini and Nasdaq look mighty heavy right now – I’m looking for shorts off a couple key resistance levels overhead – one of them might surprise you…

Crude Oil is the exact opposite – finishing the session right at the highs, it looks like traders are hunting for $90 later this week – I’m expecting a range up here, and you’re gonna love my vision on buying the next pullback…

The key for tomorrow is – don’t chase these moves.  Now is the time for patience, so wait for these setups, they won’t let you down…

E-Mini S&P (ES):

E-Mini Keys to Success:

Sellers have control into a spike and channel this evening, and with such a strong run lower today, we can assume sellers will be waiting for more opportunities to short any bounces off these lows on Wednesday.

If price goes higher, I’ll be looking for selling opportunities with buyer failure setups off the ‘Battle Zone’.  If buyers can get proof of a 123-Reversal, then I’ll look to buy the first pullback and look for a short-squeeze back to the highs.

Keep an eye on this new range forming at these lows – I’ll be waiting to fade the breakouts and sell at resistance levels above the new range (if we get it).

If price keeps pushing lower, I’ll just wait for the bounces and look for shorts off resistance levels overhead.

Buyers need to stay patient right now – there’s too much bearish momentum to try picking a bottom, so it’s best to wait for a 123-Reversal and go from there.

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

Sellers took control on the Nasdaq this morning and never looked back.

Price ran lower into a range, and breakout sellers just recently completed their measured-move to finish off the day sitting nearly at the low of day.

With all this bearish momentum, it’s safe to assume we’ll see more sellers getting short into resistance levels waiting overhead.

We may also see a trading-range develop down near these lows – if so, it’s best to look for shorts up at resistance levels above the range, so stay patient for the bulls to try taking it higher.

If price keeps pushing lower, I’ll make sure we can clear through this big support level at 15150 before I look for more shorts.  If they can breakout lower, I’ll draw my channel tighter and look to short the first test off the high.

Crude Oil Futures (CL):

Crude Oil Keys to Success:

Bulls took control on Crude Oil this morning into a trading-range and buyers kept buying the dips below the range until they were finally able to breakout to new highs.

Buyers have control, and with such a strong “open-loop” breakout going higher, we can expect buyers will be looking for ways to get long on the next pullback to support levels, such as the ‘Battle Zone’ at 85.28.

If we keep pushing, we have another resistance zone just above us, but again, we can assume buyers will be waiting for pullback entries.

If price goes lower, I’ll first look for longs with a seller failure pattern, but if sellers can get control with a 123-Reversal then I’ll switch and start looking for shorts going back to last Friday’s close at 83.63 and the pendulum-swing target (TBD).