Trading the “Sweet Spot”
Markets are still using the same ranges from earlier this week, but with some strong moves lower today, the focus will be on momentum and how price responds to the moving-average.
And remember, anytime we have a range-bound environment, it’s all about avoiding the middle and finding the “sweet spot”.
Crude Oil Can Smell that Pendulum Target!
Crude Oil is bearish with a strong run lower, which tells me to look for selling-opportunities into a second leg down to the ‘pendulum swing’ target from earlier this week.
But don’t forget about the weekly range – reminding me to watch closely to see if the buyers can respond to the moving-average and give us a short-covering rally back into the range on Friday.
E-Mini S&P is a Perfect Head-Fake
E-Mini S&P is bullish, but the strength of this recent spike lower tells me I need to respect the sellers until I can see a reliable time to enter the market long.
Knowing this, I’m going to wait for the sellers to attempt another leg lower, and look for buying opportunities into their stops for a run back up into the range tomorrow morning.
Nasdaq is Developing Into a Triangle
Nasdaq is bearish and running back down to the low of the weekly trading-range, which tells me I want to be looking LONG going back into the range above us.
The challenge, however, is the strength of this move lower, which will most likely give the sellers confidence to attempt a second leg.
Knowing that, I’m going to wait for the bears to commit at the moving-average, and then look for buying opportunities going into their “pain points” with a target back at the opposite side of the triangle.
Gold is Looking for a Second Leg Lower
Gold is bearish with a strong run off today’s high, and when you combine that with the fact that we’re in a range-bound market, the likelihood of a ‘pendulum swing’ is quite good.
Keeping that in mind, I’m trying to sell, and to do that, I’m going to look for buyers to try chasing the market higher and sell into their stops for a move back down to the range lows again.
Euro is Looking for a POP Back Up Again
Euro is bearish and trying to breakout below today’s tiny trading-range, but I’m not going to fall for this trap – selling a range breakout is never a reliable set-up.
Instead, my plan is to buy the low of this range, but since momentum has been so incredible bearish this week, I need to be more conservative with my entry, using the “nested” 2-Try Failure for a buy set-up going back up to the high of the range, and possibly the ‘pendulum swing’ target on the opposite side.
“Learn from yesterday, live for today, hope for tomorrow. The important thing is not to stop questioning.” – Albert Einstein.
