Tuesday’s Trading Strategy | SchoolOfTrade Newsletter 10/17/16

Click here to download today’s charts

Notes for Tonight’s Newsletter:

Markets are consolidating ahead of tomorrow’s session which is often a leading-indicator that we’re going to be seeing some big moves this third week of the month.  Crude Oil is bullish and trying to push through the battle zone ahead of tomorrow’s rollover date, E-mini S&P is range-bound and trying to finish rotation back to the high of the range, while both Gold and Euro are bullish but struggling to push through their measured-moves this evening. 

Crude Oil is bullish in the short-term and trying to push through the battle zone resistance just above the $50 level this evening.  The market appears to be consolidating around the ’round number’ with a support trend-line helping the buyers and the battle zone working for the sellers.  Buyers will be looking for a breakout-pullback above the battle zone or a seller-failure at the support trend line around 49.70 tomorrow.  Sellers need to beware that rising support trend-line and look for a strong breakout-pullback below the trend-line or wait for price to finish its rotation higher so they can look for a move back down to the $50 level later tomorrow.  One more thing to notice, tomorrow is the 18th, which means we will be watching for contract rollover to the 12-16 contract.

E-mini S&P is range-bound and trying to finish rotation back to the high of the range this evening, but the bulls need to get through the resistance trend-line before they can finish their target, which may open the window for the sellers to try and make a breakout lower.  The buyers have two choices, they can either buy the low of the range with seller-failures or they can wait for a breakout-pullback above the resistance trend-line on the way back to re-test the high.  Sellers on the other hand have to be careful because price will try to rotate higher so they either need to wait and sell off the highs with buyer-failure or wait to sell a strong breakout-pullback below the low of day today, which at this point is less then probable.

Gold is bullish struggling to push through the measured-move which will likely open the door for the sellers to attempt a reversal unless the buyers can get the successful break higher they are looking for in the short-term.  The buyers have control, but every attempt to push higher seems to fail which has created a resistance trend-line overhead which is now another level they need to overcome tomorrow.  Buyers would love to see a ‘trap low’ and seller-failure for the opportunity to ‘buy low’ tomorrow or they need to wait for a breakout-pullback above the both the measured-move and the trend-line overhead.  Sellers on the other hand need to take control before they consider selling, which means they need a strong break down and hold below the lows of the channel or they need to wait for the buyers to finish their move higher and then grab it on the way back down later in the session tomorrow.

Euro is bullish, and just like Gold, struggling to break through the measured-move on the way higher to finish a triple measured-move tomorrow.  The bulls have control, holding above the key reversal-line, but the resistance trend-line coming overhead tells the bulls to wait for a breakout-pullback to new highs or stay patient for a seller-failure down in the battle zone at 10,145.  Sellers on the other hand have no proof so they need to wait for the bulls to finish their move higher and then get the reversal back down, or they need to wait for a strong break down and hold below the 10,092 battle zone for a move back to re-test today’s low.