Trading with Spikes; 4 Setups for Friday
I suppose it had to happen eventually – This week’s bull run finally came to an end this afternoon after a surprise spike in Jobless Claims, combined with growing tensions between the US and China gave buyers a reason to take profit…
Looking at the charts, our favorite markets finished today with strong spikes running lower, which makes our job relatively easy; there are four reliable patterns following a spike, and I want to make sure you’re ready for them…
E-Mini S&P Sellers Looking to Catch “Dip” Buyers…
E-Mini S&P is bearish into a Spike & Range pattern; my plan is to sell above the range using the high of an expanding triangle in combination with a buyer failure pattern.
- Sell above the range high using a buyer-failure pattern
- Sell into a bull spike with a nested failure pattern
- Sell the 123-Breakout off the high of a new channel.
- Buy the 123-Reversal Pattern going higher.
Crude Oil Strength Gives Us Plenty of Options…
Crude Oil is bearish and finished with a strong spike going lower; the strength of this move tells me there are four reliable chart patterns I need to be ready for tomorrow morning.
- If Spike & Range, Sell above the high with a Buyer-Failure Pattern
- If Bear Flag, sell the “underbelly” of the sluggish bull channel
- It Spike & Channel, wait for the deep pullback and sell into stops
- Buy the 123-Reversal if the bulls can take back control
Gold’s Still Bullish, But There’s Something Wrong Here…
Gold is bullish, but a strong pullback off the highs, combined with a “hidden” resistance line tells me to avoid buying this pullback and wait for a “failed failure” to get short off the highs…
- Sell the “Failed Failure” off the bull channel lows
- Sell the 123-Breakdown off the high of a new channel
- Buy the low of a new range if buyers can retest the high.
