Trade the ‘2-Legged Correction’ | SchoolOfTrade Newsletter 04/25/17

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Crude Oil looks bullish at the low of a channel this evening, but the recent API report sent prices tumbling off the highs with such strength, we’re looking for selling-opportunities using a ‘2-legged correction’ tomorrow.

S&P is bullish with a Spike & Channel and we have a falling resistance trend-line giving us a great opportunity to ‘buy the dip’ tomorrow with a ‘2-legged pullback’.

Gold is bearish with a Spike & Channel this evening, and we’re watching a key support level on the chart that may make our job ‘selling high’ a lot more difficult tomorrow if we’re not paying attention.

Euro is bullish and we have a channel and a resistance trend-line giving us plenty of information to find some reliable buying opportunities tomorrow.

FDAX is bullish with a triangle this evening, and we have an important resistance level from yesterday’s session giving us all the information we need to formulate a plan for tomorrow.

Crude Oil Trading Strategy

Crude Oil looks bullish at first, but the reaction to this afternoon’s API Report was so dramatic off the highs, it’s hard to believe these buyers will be able to keep control of this market, even at the low of this bull channel.  Sellers will be looking for a ‘2-legged correction’ off this recent low to avoid ‘selling low’ tomorrow, and their target is back down to re-test the low.  Buyers, on the other hand, need to see these sellers try and fail twice before they will have the confidence to buy this pullback.  Don’t forget, tomorrow’s Inventory Report is out at 10:30am EST, so it’s ‘early in and early out’ tomorrow, and watch those support and resistance levels.

Crude Oil Inventory Levels for Wednesday: 

50.18, 49.94, 49.70*, 49.46*, 49.22, 48.98

E-Mini S&P Trading Strategy

E-Mini S&P is bullish with a Spike & Channel this evening, and this falling resistance trend-line is telling us to look for opportunities to ‘buy the dip’ using a ‘2-legged pullback’ into the ‘battle zone’ tomorrow.  One thing that stands out on this chart is the ‘trap low’ that allowed the bulls to ‘buy low’ earlier today, which tells us that we may be in store for a deeper correction tomorrow to attract more buyers into this market after this 2-day bull run.

Gold Trading Strategy

Gold is bearish with a Spike & Channel and sitting right on top of the prior month high support this evening.  The spike & Channel tells us to look for selling-opportunities up at resistance levels overhead, and the prior month high will make for an excellent target on the way back down.  If price pushes lower, we will be wise to avoid chasing the move lower, and focus on ‘selling high’ up around the high of the channel for a ‘quad-down’ target tomorrow.

Euro Trading Strategy

Euro is bullish and trading at the low of a channel this evening, which is a great place to begin looking for buying opportunities as long as we can clear this resistance trend-line looming overhead.  One big clue on the chart is the prior month high, which we would love to use as a magnet, so we will be wise to look for buying opportunities down in the ‘battle zone’ for a target going back up to re-test the Double-Up near the high.

FDAX Trading Strategy

FDAX is bullish, trading with a triangle, and sitting right at yesterday’s high, telling us that bulls have control, but they don’t see enough value in buying the highs after yesterday’s big bull run.  The most important clue this evening is this triangle; we want to buy the low of the triangle using failures and traps, avoiding the middle, and the temptation to buy the highs tomorrow.