Trading Parabolic Moves | SchoolOfTrade Newsletter 12/07/16

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“Nothing in the world can take the place of Persistence. Talent will not; nothing is more common than unsuccessful men with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘Press On’ has solved and always will solve the problems of the human race.”

Crude Oil is bearish, but trading at the low of a bear spike & channel tells the sellers to wait for the rotation back up to the high of the channel tomorrow.

E-Mini S&P is bullish, but after a massive run higher today, we can assume that buyers will be hesitant to buy more until they get a decent pullback off the highs. 

Gold is bullish, but struggling to break through the highs of a trading-range, which tells the buyers to look for a successful breakout-pullback above the range highs, or wait for seller-failures at the low of the range.

Euro is bullish, but we have a lower-high on the chart which tells us that buyers are weary of buying at such a high price, so our goal tomorrow will be look for a correction back to the ‘battle zone’ for a re-test of the high.

FDAX is bullish, but this parabolic move higher today is hardly sustainable and buyers know that the most reliable buying opportunities will come after a deep pullback off today’s highs. 

Crude Oil is bearish, but trading at the low of a bear spike & channel tells the sellers to wait for the rotation back up to the high of the channel where they can expect to find much more reliable selling-opportunities for a move back down to the $50 round number tomorrow.  The buyers have two options right now;  they can buy a possible channel ‘overshoot’ for a move back to the highs, or they can buy the seller-failure at the battle zone for a move back to re-test today’s high, either way, they need to stay patient.

E-Mini S&P is bullish, but after a massive run higher today, we can assume that buyers will not only take profit here, but they will be hesitant to buy more until they get a decent pullback off the highs.  Typically, when we see a hockey stick type move like this we end up seeing a trading-range develop the following day with a bull bias, so our plan will be to look for ‘traps’ and ‘failures’ around the support levels waiting below to give us the opportunity to participate in this bull market without ‘buying high’.  Sellers on the other hand, have zero proof, so they need to wait patiently until we can get this market to literally collapse off the highs tomorrow and then hold a pullback.

Gold is bullish, but struggling to break through the highs of a trading-range, which tells the buyers to look for a successful breakout-pullback above the range highs, or wait for seller-failures at either the support trend-line or low of the range below.  Sellers have a great opportunity to grab this market and run back to the lows, but if you aren’t already short off the highs, you need to beware selling into the support trend-line, so look for a breakout-pullback below the trend-line and the target is back to the low of the range tomorrow.

Euro is bullish, but we have a lower-high on the chart which tells us that buyers are weary of buying at such a high price, so our goal tomorrow will be look for a correction back to the ‘battle zone’ for a re-test of the high and possible a measured-move tomorrow.  Sellers on the other hand, need to wait for control, which will come after the buyers fail at the low of the ‘battle zone’ tomorrow.

FDAX is bullish, but this parabolic move higher today is hardly sustainable and buyers know that the most reliable buying opportunities will come after a deep pullback off today’s highs.  Most of the time, these types of moves end up turning into trading ranges, so buyers will be waiting for a pullback to support levels below and then look for a target going back up to the highs tomorrow.  Sellers have to be careful tomorrow because any pullback off these highs will likely be seen as a bargain buying opportunity, so unless this market completely collapses, the only selling we will be doing tomorrow is taking profit up at the highs again.