My Favorite Trade for FOMC (Wait for it!)

Are you ready for FOMC tomorrow?

We need to pick our spots wisely with FOMC news just after lunch on Wednesday, but not to worry, I have some great setups on my radar…

Both Emini and Nasdaq are bearish into the close today, and the strength of this recent move tells me to look for a “failure into pullback” at 2 key resistance zones overhead…

Crude Oil is bullish, but the way this market “melt up” this afternoon tells me to stay patient for a deep pullback – how deep?  I’ll show you where to look in tonight’s video…

Oh, don’t forget – markets love to reverse ahead of major news, so I’m also watching for these 3 reversal patterns too…

E-Mini S&P (ES):

E-Mini Keys to Success:

Bears took control into a range on the Emini ES this morning, but the bulls grabbed control this afternoon with a strong run higher and they’re currently trying to hold this recent pullback for a retest of the high.

Buyers are looking for another leg higher, but this pullback is really strong, so it’s best to use the 2-try failure pattern to get in long.

Sellers would love to go back into the range below us, but they’ll need to avoid this support trend-line, so the best entries will be selling traps above recent highs, or a breakout-pullback below this trend-line.

Keep in mind – today’s range was completely inside yesterday’s, suggesting a big trading-range over the last 2 days – best to fade the breakouts in these situations.

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

Nasdaq is bearish and sellers just completed their retest of today’s spike and channel lows.

Sellers took price lower with a choppy “spike and channel” pattern going lower – spike and channel patterns are notorious for bouncing up into the “base” of the channel, and you can see sellers were waiting to short into it.

Now the sellers are sitting on the major lows waiting for more information – do we bounce off these lows and give bears another chance to sell high, or do we push through these lows looking for another leg lower and a retest of Monday’s low?

If price bounces, sellers will use buyer failures to get short, while buyers will be looking for a 123-Reversal going higher.

If we go lower, sellers will look for a 123-breakout to new lows and look to sell into the first test of the new channel high.

Crude Oil Futures (CL):

Crude Oil Keys to Success:

The day began in a range, but the buyers took advantage of a failed rotation off the highs to jump on a strong runaway move going higher.

Bulls have control, but anytime we see a long, slow grind higher, it’s best to wait for a deep pullback because these types of moves have often “gone too far” and need to pullback to attract more buyers into the market.

Bulls will wait for a deep pullback and “trap” in sellers for a retest of the highs, while sellers will be looking for shorts off a double-top retest, or a 123-Reversal off the moving-average.