Looking for Traps Wednesday | SchoolOfTrade Newsletter 01/17/17

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“If someone is going down the wrong road, he doesn’t need motivation to speed him up. What he needs is education to turn him around.”

Crude Oil is bearish and trying to finish off the measured-move this evening but the candlesticks are telling us that sellers may not be interested in selling this low, so we’re waiting for a retracement.

E-Mini S&P is sideways and trading inside a range this evening so our plan is to sell high, buy low, and use the ‘2-Try Rule’ tomorrow.

Gold is bullish and trying to re-test today’s high, but a recent triangle on the chart tells us the most reliable buying opportunities will likely be after a trap below the low.

Euro is bullish and just inches away from re-testing the high, so the plan is to look for a successful breakout-pullback or wait for traps.

FDAX is bullish and trading with a spike & triangle this evening which tells us to look for traps at the lows, or a strong breakout through the highs.

Crude Oil

Crude Oil is bearish and trying to finish off the measured-move this evening but the candlesticks are telling us that sellers may not be interested in selling this low, so the plan is to wait for a pullback to resistance so we can ‘sell high’ tomorrow.  If we don’t get the pullback, then we need to beware selling into the low of the channel, so the plan will be to look for ‘traps’ above prior swings, which is where we know the largest orders will be waiting to sell it back down again.

E-Mini S&P

E-Mini S&P is sideways and trading inside a range this evening with the short-term bias on rotating back to the high of the range after the sellers failed their breakout attempt earlier in the session.  Whenever we see double-tops and double-bottoms on the chart we know we have a range, and that range takes center-stage until we see a successful breakout-pullback outside the range tomorrow.  The plan is simple; buy low and sell high using the ‘2-Try Rule’ and avoid the middle of the range at all cost. 

Gold

Gold is bullish and trying to re-test today’s high, but a recent triangle on the chart tells us the most reliable buying opportunities will likely be after a pullback.  The bulls started the session on strength, but they failed to re-test the high, which created a falling resistance trend-line, which tells the buyers to be looking for either a successful breakout-pullback above the trend-line, or a ‘trap low’ down in the ‘battle zone’ tomorrow.  If price runs up to the highs, then we need to stay patient, looking for traps as the buyers try to extend the move up to the Double-Up and the measured-move targets tomorrow.

Euro

Euro is bullish and just inches away from re-testing the high, and we know that ‘buying high’ isn’t the most reliable way to earn a profit, so the plan will be to wait for either a successful breakout-pullback above the highs, a trap low below the range, or a correction back into the ‘battle zone’ from the spike & channel we saw earlier in the session.

FDAX

FDAX is bullish and trading with a spike & triangle this evening which tells us the bulls have control, but buyers are clearly rejecting the idea of buying this high, so the plan is to either get a successful breakout-pullback above the highs, or look for traps and failures down in the ‘battle zone’ waiting below.