Thursday’s Trading Strategy | SchoolOfTrade Newsletter 01/11/17

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“The tragedy in life doesn’t lie in not reaching your goal. The tragedy lies in having no goal to reach.”

Crude Oil is bullish with a spike & channel, trying to re-test the highs after today’s inventory report sent prices racing higher. 

E-Mini S&P is bullish after a strong run higher to finish out the session today, telling buyers to be looking for a pullback and a re-test of the highs tomorrow. 

Gold is bullish, but after an overshoot of the channel, I’m expecting the most reliable buying opportunities to be after a deep two-legged correction.

Euro is bullish and trading with a spike & range, telling the buyers to be looking for buying opportunities as price pulls back to support levels tomorrow. 

FDAX is bullish with a flag pattern, telling the buyers to look for a successful breakout-pullback using the falling resistance trend-line coming overhead. 

Crude Oil

Crude Oil is bullish and trying to re-test the highs after today’s inventory report sent prices racing higher.  The bulls have control, and will be looking for buying opportunities on this recent pullback for a target going back to the highs.  Our plan for tomorrow will be to look for a successful breakout-pullback above the measured-move to keep pushing higher, or a correction off the highs to attract more buyers.  Assuming we get the correction, we will be watching for the sellers to fail so we can buy on the way back up to the highs, but if the sellers are successful in taking control, we will follow the trend lower, with a target going back to the low of day.

E-Mini S&P

E-Mini S&P is bullish after a strong run higher to finish out the session today, telling buyers to be looking for a pullback and a re-test of the highs tomorrow.  The bulls have clear control, and with such a strong push higher, we can expect that buyers will be waiting for the proper “entry trigger” to buy the next pullback to support.  If price continues to push higher, we have the ‘No Trade Zone’ up at 73.50, which are the highs from earlier this week, so beware chasing the move, and look for pullbacks, traps, and failures to ‘buy low’ if price keep running higher.

Gold

Gold is bullish, but after an overshoot of the channel high, I’m expecting the most reliable buying opportunities to be after a deep two-legged correction back into the ‘battle zone’ waiting below the channel low.  The bulls had a crazy run higher today, and when that move ‘overshoots’ the highs by so much, buyers take all their profit and price collapses off the highs, and with such a big correction, the buyers can’t recover, and we get a complete trend reversal in the opposite direction.  Buyers will be looking for ways to get into this pullback for a target up at the $1200 round number, but they need to wait for the proper entry trigger, which may not come until we complete the ‘overshoot’ below the ‘battle zone’ tomorrow.

Euro

Euro is bullish and trading with a spike & range, at the highs of a large, multi-tiered channel this evening, which tells the buyers to be looking for buying opportunities as price pulls back to support levels tomorrow.  The trading-range gives the buyers an opportunity to use a seller-failure going back to the highs, and if price keeps pulling back we have the measured-move and the ‘battle zone’ waiting for the buyers to reload as well.  One thing to keep in mind is the size of this channel because the sellers may be able to hold this pullback and make a run back to the ‘battle zone’, which will give the sellers an opportunity in the short-term and the buyers will have to stay patient until we turn higher again later in the session tomorrow.  

FDAX

FDAX is bullish with a flag pattern this evening, which tells the buyers to look for a successful breakout-pullback using the falling resistance trend-line coming overhead, or the rising support trend-line coming up from below.  The buyers made a strong run up to new highs this morning, but the buyers clearly rejected the higher price and now price is pulling back to attract more bulls into the market.  One thing to keep in an eye on tomorrow is the ‘battle zone’, because if broken, will give the bears an easy chance to grab price and run it back down to the lows.