Trading Strength Moves | SchoolOfTrade Newsletter 11/02/16

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Notes for Tonight’s Newsletter:

Crude Oil is bearish and trading at the highs of a range, E-mini S&P is bearish and trading at a triple measured-move, Gold is bullish but a recent collapse off the highs gives the bears a great opportunity to hold the next pullback, and the Euro is bullish and trying to re-test the highs tomorrow but they need to get through some key levels of resistance first.

Crude Oil is bearish and trading at the highs of a range this evening.  The sellers have control after a strong move lower this morning but a higher-low has created a rising support trend-line which may give the buyers the opportunity to hold this pullback and make a run up to the battle zone and possibly up to test the news resistance level overhead.  Sellers will be looking for the buyers to fail on the next pullback, but they don’t want to sell into the support trend-line so they either need to wait for failures up at the battle zone or look for a breakout-pullback below the trend-line for a target going back to the lows and possibly the news target way down at 43.78 tomorrow.

E-mini S&P is bearish and trading at a triple measured-move this evening.  The bears have control but they won’t want to sell this low, so their best option will be to wait for a move back to the resistance levels up around the high of the range or look for a strong break lower that can clear below the support trend-line waiting below, which is sure to cause a lot of trouble for the bears if they can’t break through it tomorrow.  Buyers, on the other hand, need to wait for proof before they can get anything reliable, and they will be looking at the support trend-line below the range and the ‘battle zone’ above the range for the most reliable opportunities tomorrow.

Gold is bullish in the medium-term, but a recent collapse off the highs gives the bears a great opportunity to hold the next pullback and make a run for today’s low.  Whenever I see a strong move in one direction I know the odds are high for a follow-up leg (in this case lower) so the bears will be looking for a pullback to the moving-average and a move to re-test the battle zone and possibly push down to re-test yesterday’s high and/or today’s low.  The buyers, on the other hand, need to be careful because this much strength off the highs won’t be ignored, so their best option is to wait to get back above the moving-average and hold their own pullback for a move back to re-test the highs (and possibly more) tomorrow.

Euro is bullish and trying to re-test the highs tomorrow but there are a few resistance levels standing in the way which may give the sellers a chance to take control below the battle zone for a run back to re-test the low from earlier today.  The buyers have control, and all they need to do is get back above the resistance trend-line and moving-average and they can buy a pullback for a move back to the highs and possibly a double-up target later in the day tomorrow.  Sellers, on the other hand, do not have control and they are sitting just above the battle zone which tells them they are better off waiting for some strength below the battle zone and then hold a pullback for a move back to re-test the lows.