Trading a Runaway Market | SchoolOfTrade Newsletter 04/19/17

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Crude Oil is bearish as it tumbled lower today, but this market has likely moved ‘too far, too fast’ and sellers will be weary of selling these lows, even with the possibility of testing the $50 level tomorrow. 

E-Mini S&P is bearish with a channel and wedge this evening, undoubtedly being dragged lower by the price of oil this afternoon, but we have two clues on the chart telling us to stay patient for a ‘2-legged correction’ to sell more tomorrow.

Gold is bearish, but the sellers recently tried twice to re-test the low and appear to be failing, which tells us to use this recent spike & channel if the bulls can take control tomorrow. 

Euro is bearish with a wedge this evening, telling us to look for selling-opportunities up at resistance levels for a reliable sell down to the target tomorrow.

FDAX is bearish with a strong move back to the round number this evening, and we can assume that sellers will likely take profit at these lows, and look for a better place to sell more tomorrow. 

Crude Oil Trading Strategy

Crude Oil is bearish as it tumbled lower today in the wake of the Inventory Report.  The bears clearly have control, but this market has likely moved ‘too far, too fast’ and sellers will be weary of selling these lows, even with the possibility of testing the $50 level tomorrow.  The big clue on this chart is the rising support trend-line, which will make for an excellent selling-opportunity if we can use it as resistance.  If price tumbles lower again, we will avoid chasing the move and look for ‘traps’ to keep selling down to $50 tomorrow.  We always want to keep an eye on a possible trend-reversal as well, which would require a strong move higher, with a successful breakout-pullback for the bulls to take control.

E-Mini S&P Trading Strategy

E-Mini S&P is bearish with a channel and wedge this evening, undoubtedly being dragged lower by the price of oil this afternoon.  The bears have control, but a ‘double overshoot’ of the channel low, combined with wedge support, tells us to look for the most reliable selling-opportunities up at resistance levels overhead, keeping an eye out for a ‘2-legged correction’ up to the ‘battle zone’ for a target going back down to re-test the low.

Gold Trading Strategy

Gold is bearish, but the sellers recently tried twice to re-test the low and appear to be failing, which tells us to use this recent spike & channel if the bulls can take control tomorrow.  For a second day in a row, gold spiked lower just before the 10am ‘London fixing time’, but just like yesterday, the bears have struggled to keep it going lower.  The prior day low appears to be holding as support, and this spike & channel gives us the most reliable clues to use for tomorrow.  A break lower will tell us to look for a ‘trap high’ to avoid selling into support.  A break higher will confirm the sellers have failed, and we will look for a ‘trap low’ to avoid chasing the move higher.

Euro Trading Strategy

Euro is bearish with a wedge this evening, telling us to look for selling-opportunities up at resistance levels for a reliable sell down to the target just below the measured-move.  We can easily see that sellers just got a perfect ‘trap high’ at a prior swing overhead, so we have to stay patient.  Keep an eye on the resistance trend-line overhead, looking for another opportunity to sell high, or we need to see strength through the wedge target for a move down to last week’s high.

FDAX Trading Strategy

FDAX is bearish with a strong move back to the round number this evening, and we can assume that sellers will likely take profit at these lows, and look for a better place to sell more tomorrow.  This strong spike down tells us to look for selling-opportunities up at resistance levels for a re-test of the low, followed by a possible spike & channel tomorrow.  The big key tomorrow is this round number.  The goal will be to find selling-opportunities up at resistance levels above the 12,000 so we can use that as a magnet to draw price back down again.