Which Open Loop Closes First? Bulls or Bears?
We’re back to our desks for the second week of January, and with lots of stimulus talk on the news feeds, combined with those big open-loop moves we saw last Friday, there is a ton of opportunity baked-into these markets this week…
The Emini has a pair of open-loops both above and below last week’s trading-range, which means both buyers and sellers should see great opportunities around the edges of the range…
Gold may be bearish in the long-term, but this morning’s “rotation off the low” is a massive clue for the bulls going into Tuesday, and Crude Oil still has the open-loop left wide open from last Friday’s remarkable run higher…
My biggest question is – who’s open-loop will get closed first?
E-Mini Keys to Success:
- Weekend GAP leaves magnet back at all-time highs
- Bears run lower, back into range, expect pendulum swing lower, open-loop waiting
- If buyers run higher, target retest all-time highs with bear traps
- If sellers run lower, expect retest of lows, buyers looking for nested failures to get long, sellers waiting for proof of bear 123-breakout lower
Best Setups for Tomorrow:
- (UP) – Bulls Need Traps or 123-breakout, Bears Need Crown reversal
- (DOWN) – bears need traps, bulls need nested failures
- (SIDEWAYS) – sit on hands, wait for breakouts
Crude Oil Keys to Success:
- Buyers Finished last week with strong spike higher, retest is likely this week
- Sellers got strong start running lower, and got their retest of the low
- Sellers took profit and price explodes higher, confirming buyers have control
- Price sits in the middle of the range with bulls in control
- Buyers will avoid buying higher unless something changes, such as OPEC news
- Sellers will sell high, but will be foolish to sell near today’s lows
- Watch a trading-range develop in the middle for tomorrow
Best Setups for Tomorrow:
- (UP) – Bulls need traps or 123-breakout, bears need crown reversal
- (DOWN) – Bulls need seller failure or nested failure. Bears need 123-breakout
- (SIDEWAYS) – sit on hands, wait for breakouts
Gold Keys to Success:
- Bears finish last week with strong run lower
- Sellers try to push lower to begin week but fail, price bounces higher
- Bears in control with a wide range, but beware bullish “rotation off the low”
- Wide Range says focus on the edges of the range with failure setups
Best Setups for Tomorrow:
- (UP) – Bulls need traps & 123-breakout. Bears need nested failures
- (DOWN) – bears need traps & 123-breakout. Bulls need crown reversals
- (SIDEWAYS) – sit on hands, wait for breakouts
