Trading the Short-Covering Rally

“If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception; it is a prevailing attitude.”

Crude Oil is bullish as it tries to rally off the range lows, and a small trading-range on the chart is telling me exactly where to look for buying opportunities tomorrow morning.

E-Mini S&P is bearish and trading at the low of a range, so rather than trying to sell, I’m waiting to buy with the 2-Try Failure pattern tomorrow morning.

Nasdaq is bearish, but trading at the low of a range isn’t a great place to be selling, so my plan is to wait for the sellers to fail so I can buy this back up into the range.

Gold is bearish, but we just finished the ‘2-Try Rule’ at the low of the range, so I’m looking for buying opportunities going back into the range, and I have my eye on a falling resistance trend-line to use as support.

Euro is bearish with a strong move down to the low of the range, and my plan is to wait for the completion of the ‘pendulum swing’ before I start looking for buying opportunities going back up in the range tomorrow morning.

We have a handful of ranges to work with tonight, and with most markets trading near the low of the range, we’re looking to fade the breakouts for a short-covering rally tomorrow morning.

Crude Oil Day Trading Strategy

Crude Oil is bullish with a trading-range, triangle and measured-move on the chart tonight.

The bulls took control with this rally off the range lows, and more importantly, the sellers were unable to take control into lunch, leaving us going sideways with a possible triangle for tomorrow morning.

I would expect this market to rotate back to the high of this large range, which means I’m looking for buying opportunities, and the best place to find buying opportunities with a triangle is to use the 2-Try Failure pattern below the low.

E-Mini S&P Day Trading Strategy

E-Mini S&P is bearish with a trading-range, and pending ‘2-Try Rule’.

The bears have control with strong momentum going lower, but with this appearing to set-up as a wide range tomorrow morning, my plan is to wait for these sellers to finish this second leg lower and then start looking for seller-failures to buy back into the range.

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E-Mini Nasdaq Day Trading Strategy

E-Mini Nasdaq is bearish with a trading-range and strong move lower.

The bears have the momentum on their side, but all signs point to this being one big trading-range.

So my plan is the use the 2-Try Failure pattern to look for buying opportunities off the low of this range.

Gold Day Trading Strategy

Gold is bearish with a trading-range, ‘pendulum swing’, and resistance trend-line on the chart tonight.

The bears certainly have the momentum, but they’ve completed the ‘pendulum swing’ and they’ve tried twice to break through the lows.

Now all I’m waiting on is a successful breakout-pullback to this resistance trend-line and I can start looking for buying opportunities and a short-covering rally back into the range tomorrow.

Euro Day Trading Strategy

Euro is bearish with a trading-range, ‘pendulum swing’, bear channel, and a strong move lower.

The bears have the momentum on their side, which tells me that, even though this is the low of a range, I need to be patient to let the sellers finish this second leg lower before looking for buying opportunities off the low.

The ‘pendulum swing’ is a big clue, which reminds me that there is still room to go, and I would love to wait for a “double overshoot” of the channel low for the momentum to swing back in the opposite direction for a short-covering rally tomorrow morning.