Trading with Velocity Zones
With most professional traders sitting on the sidelines this afternoon for the FOMC Announcement, we know that tomorrow (what I call “Reaction Thursday”) has the potential to be a very busy trading day…
And with a lot of strong moves in the wake of this afternoon’s rate cut, I’m looking closely at the charts, finding the “velocity zones” where I can wait for the opportunity to buy a pullback – are you ready?
Crude Oil Keeps Grinding Lower (Where’s the Entry?)
Crude Oil is bearish and keeps grinding lower as the week goes on, and the lack of any real pullback off these lows is a big clue for tomorrow morning…
Knowing this, I can assume there are a lot of sellers waiting up at the highs of the bear channel, and I’m waiting for the next pop higher so I can sell it back down again.
E-Mini S&P Spikes Higher After FOMC
E-Mini S&P is bullish with a strong spike running higher, which tells me to look for one of three different chart patterns – channels, ranges, and flags…
But the most important clue on the chart is what we DIDN’T see this afternoon, and that important clue helps me define the “velocity zones” where I’m looking for my buy set-ups on Thursday morning…
Nasdaq Bulls Love the Rate Cut – Where’s the next entry?
Nasdaq is bullish with a strong run higher, and the strength of this move tells me that buyers will be eagerly waiting to buy the next pullback to support levels…
So I’ve marked the higher-highs with a trend-line, and used that to find a new Hidden Channel to buy off the lows tomorrow morning…
Gold Runs Lower, But Did You See Where We Are?
Gold is bearish, but look at the bigger picture and it’s easy to see we’re trading below the weekly trading-range, which isn’t a great place to be selling…
I’d rather be a buyer off these lows, but I need to respect the bearish momentum before I commit to the entry, and I’m looking for a “nested” seller-failure to buy it back up into the range tomorrow morning.
Euro Finishes the Day Going Sideways…
Euro is bearish and finishing the day inside a range, which tells me to buy the low, sell the high, and avoid the middle tomorrow morning…
And knowing that the short-term momentum is bearish, my goal is to sell off the high using a buyer-failure set-up on Thursday.
“Stop focusing on unproductive crap. Don’t be afraid to break things. Don’t be romantic with it, go after results. Don’t take the time to breathe. Don’t aim for perfect. And whatever you do, keep moving. Reread this a few times . . .”
