Spike & Channel Strategy | SchoolOfTrade Newsletter 04/11/17

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Crude Oil is bullish with a spike & channel after OPEC news sent prices racing higher ahead of the Inventory Report tomorrow morning. 

S&P is bullish, but trading at the high of a spike & channel is a horrible place to buy, so we’re watching two (2) set-ups to prevent chasing the move tomorrow.

Gold is bullish after a strong run higher today, but we have a ‘quadruple-up’ target telling us this move may soon be coming to an end, and a spike & channel tells us where to look for the pullback.

Euro is bearish with a failed spike & channel, and a recent change in direction tells the bears to look for a hidden channel coming down overhead.

FDAX is bullish with a V-Bottom, telling us to ‘buy low’ with pullbacks as the bulls hunt for a re-test of yesterday’s high.

Crude Oil

Crude Oil is bullish with a spike & channel after OPEC news sent prices racing higher ahead of the Inventory Report tomorrow morning.  The OPEC news gives us an easy ‘Double-Up’ target (53.85), which lines up nicely with the measured-move just a few ticks below it, but the important clue comes from the spike & channel.  If price pushes higher, our goal is to avoid chasing the move, looking for traps and failures as price pulls back off high.  If price pulls back, we’re looking for buying opportunities off the low of the channel and the correction zone just below.  Keep in mind, we have major news at 10:30am EST tomorrow, so beware trading after 10:15am, and be sure to give it 10-minutes afterwards before getting back at it again.

Crude Oil Inventory S/R Levels for Wednesday:

53.67, 53.54, 53.41, 53.28, 53.15, 53.02

E-Mini S&P

E-Mini S&P is bullish and trading at the high of a spike & channel, which is important because we don’t want to buy high, we want to buy low, so we need to stay patient for the next reliable set-up.  If price pulls back off these highs, we’re looking for traps and failures around the low of the channel with a target back up to the high.  If price keeps pushing higher, we don’t want to chase the move, so we will look for traps, with a target up at the high (55.75) the measured-move (59.25), and yesterday’s high (63.25).

Gold

Gold is bullish after a strong run sent prices back to last week’s high, and this spike & channel, combined with the ‘quadruple-up’ are giving us some great clues for tomorrow.  The ‘quad-up’ is a big clue because that is typically where big moves like these end, traders will take profit, and will wait for a deep correction to buy more.  The spike & channel tells us to look for buying opportunities at the lows of the channel, and down in the correction zone.  If price continues to push higher, the bulls will wait to buy low with traps.  If price pulls back off these highs, we expect lots of buyers to be waiting below every support level with a target going back to the high.

Euro

Euro is bearish and trying to re-test today’s low, but the recent change in direction tells us to avoid chasing this move lower, and focus our attention on selling high tomorrow with traps and failures up at resistance levels overhead, such as this hidden channel.  The bulls spent most of this morning with firm control and a spike & channel, but they reached their “Double-Up” and apparently that was all they were looking for because price collapsed off the high, a little strong to be called a pullback, and sellers will certainly be looking for opportunities with the right set-up tomorrow.

FDAX

FDAX is bullish with a spike & channel as it tries to complete a ‘V-bottom’ to re-test today’s high.  The bulls have control, and the spike & channel tells us to ‘buy low’ with deep pullbacks, or avoid chasing the move higher with traps tomorrow.  Targets for the bulls are today’s high (48.5) and the measured-move up around 96.0.