Trading Ranges for Friday | SchoolOfTrade Newsletter 09/22/16

Notes for Tonight’s Newsletter:

After such a wild ride from the Fed over the last two days, we’re ready to wrap-up another excellent week in the markets with what should be a range-bound Friday; Crude Oil is bearish trading inside a bull-flag, E-mini S&P is bullish and trading inside a triangle, Gold is bearish and trying to finish the move back to the trading-range where the day started, and Euro is bearish after a spike & channel completed and then collapsed off the highs.

The first thing we want to keep in mind for tomorrow is that this week has been filled with big moves coming off the FOMC Announcement, and most often that eventually results in a few days of sideways trading, so the word of the day tomorrow is ‘range’ and we want to be keeping an eye out for this trading ranges that will likely start to develop mid-morning tomorrow.  Once we see a trading range, we then begin to buy low, sell high, avoid the middle and focus on failures.

Crude Oil is bullish in the long-term but bearish in the short-term trading inside a bull-flag which is basically a bear-channel coming off today’s high.  A bull-flag tells the sellers to sell off the highs and buyers to buy off the lows, focusing on traps and failures tomorrow.  Buyers will be looking for buying opportunities at the low of the channel and want to avoid buying into the high of the channel until you get a successful breakout-pullback on the way up to new highs and possibly last week’s high at 47.12.  Sellers on the other hand, will be looking for opportunities to sell the high of the channel using buyer-failures or a STRONG break lower that can hold below the measured-move for a target going back to today’s low. 

E-mini S&P is bullish and trading inside either a triangle or bull-flag this evening which tells the buyers to look for opportunities using failures at the lows and sellers to look for opportunities using failures at the highs.  The buyers have the edge going into tomorrow’s session and will be looking for seller-failures at the lows or a strong breakout pullback through the highs if they really get this move going, while sellers will be looking for buyer-failures off the highs and a strong break down below the battle zone for a target back down at today’s low.

Gold is bearish and trying to finish the move back to the trading-range where the day started and a recent strong move from the bears, combined with a bear channel tells the sellers to look for traps and failures at the resistance levels overhead for a potential measured-move back down to where the day started.  Buyers on the other hand, will need to see something strong enough to get back above the resistance trend-line and then hold a pullback for a move back to re-test the highs tomorrow.

Euro is bearish after a spike & channel completed its move and collapsed off the highs and now the sellers will be looking for another leg down with a target back at today’s low and possibly the round number tomorrow.  The sellers have control, and with the strong move down we expect them to be selling the moving-average as well as looking for traps and buyer-failures up at the battle zone as well.  Buyers have no proof at this time so the only way they can be confident buying will be after a VERY strong break higher that can hold above the battle zone for a move back up to the highs tomorrow.