Trading Breakouts (and Failures) on ‘Reaction’ Thursday

Are you excited for “Reaction” Thursday?

I hope so – because the day after the FOMC Announcement is often one of the best trading days of the month!

Emini, Nasdaq and Gold are all coiled-up inside ranges after today’s announcement — perfect for trading breakouts, failures, and rotation…

I love range-bound markets, and you’ll love them too once you see how simple this “range bound” strategy really is!   Let me show you…

E-Mini S&P (ES):

E-Mini Keys to Success:

• Bulls have control into a trading-range today.
• Buyers will look for longs at support levels below the range, as well as breakout trades going higher on strength.
• Sellers can get short off resistance above range highs, and can sell breakouts on strength below the range.

Best Trades for Tomorrow: 

• UP – buy the 123-breakout (or) sell the buyer failure off range highs.
• DOWN – buy the seller failure (or) sell the 123-breakout going lower.
• SIDEWAYS – sit on hands, avoid the middle and wait for a breakout.

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

• Buyers took control of momentum into a trading-range today.
• Buyers will be looking for buying opportunities at support levels just below the range, or breakout trades going higher on strength.
• Sellers can sell off resistance above the range with failures, or they can sell the breakout going lower on strength.

Best Trades for Tomorrow: 

• UP – buy the 123-breakout (or) sell the buyer failure
• DOWN – buy the seller failure (or) sell the 123-breakout
• SIDEWAYS – avoid the middle and wait for a breakout

Gold Futures (GC):

Gold Keys to Success:

• We spent the day trading sideways in a range ahead of the FOMC report, then price jumped back and forth with a pendulum-swing going lower.
• Buyers will be looking for longs off these support levels below the range, as well as breakout trades going higher above the range.
• Sellers have a lot of momentum coming off the highs, so they may get a breakout going lower, or they’ll need to wait for sell setups off range highs.

Best Trades for Tomorrow: 

• UP – buy the 123-Reversal (and) buy the 123-breakout
• DOWN – sell the 123-breakout (or) buy the seller failure