Is it Too Early to Short this Breakout?

Am I crazy for looking to short this breakout?

I know – the market is certainly bullish, and I’ll be looking for ways to buy pullbacks at support levels tomorrow morning…

But did you see the overshoot above the range on the Eminis? 

The failed rotation on the Gold? 

I’d love to get short off these highs, AND long off the lows, and I have some great  price-action setups to help us time the entries.  Let me show you…

E-Mini S&P (ES):

E-Mini Keys to Success:

• Strong “runaway market” for the bulls today, which didn’t stop until they reached the round number at 4200.
• Anytime we see such a big move in one day, the following day is likely a range, so I’ll be watching to see it develop overnight.
• If this market continues to trend higher, buyers will be buying pullbacks.
• If this market turns sideways into a range, then buyers will focus on buying breakout failures at support levels below the range.
• Sellers don’t have any momentum so they need to wait for a reversal to get momentum moving back lower again.

Best Trades for Tomorrow: 

• [UP] – 123-breakout to buy (or) nested failure to sell
• [DOWN] – nested failure to buy (or) 123-Reversal to sell

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

• Strong run higher completes a large measured-move and appears to be showing signs of a trading-range going into the overnight session.
• If we keep trending higher, buyers will be looking for pullbacks
• If we start trading sideways, buyers will be looking for entries below the range.
• Sellers need to stay patient because the momentum is firmly in the hands of the bulls.

Best Trades for Tomorrow:

• [UP] – 123-breakout to buy (or) nested failure to sell
• [DOWN] – nested failure to buy (or) 123-Reversal to sell

Gold Futures (GC):

Gold Keys to Success:

• Bullish into a range, but with buyers struggling to rotate higher, we should expect a strong run lower to take out the lows before another try going higher, or a reversal going lower.
• Sellers will be looking to capitalize on this opportunity, selling failures off the highs and breakouts going lower.
• Buyers have to be careful on the next pullback because sellers will have all the momentum

Best Trades for Tomorrow:

• [UP] – nested failure to sell (or) 123-breakout to buy
• [DOWN] – 2-try trap to sell (or) nested failure to buy