Thursday, September 22, 2016

Trading Ranges for Friday | SchoolOfTrade Newsletter 09/22/16


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"Courage is like a muscle. We strengthen it with use." 
Notes for Tonight’s Newsletter:
After such a wild ride from the Fed over the last two days, we're ready to wrap-up another excellent week in the markets with what should be a range-bound Friday; Crude Oil is bearish trading inside a bull-flag, E-mini S&P is bullish and trading inside a triangle, Gold is bearish and trying to finish the move back to the trading-range where the day started, and Euro is bearish after a spike & channel completed and then collapsed off the highs.

The first thing we want to keep in mind for tomorrow is that this week has been filled with big moves coming off the FOMC Announcement, and most often that eventually results in a few days of sideways trading, so the word of the day tomorrow is 'range' and we want to be keeping an eye out for this trading ranges that will likely start to develop mid-morning tomorrow.  Once we see a trading range, we then begin to buy low, sell high, avoid the middle and focus on failures.

Crude Oil is bullish in the long-term but bearish in the short-term trading inside a bull-flag which is basically a bear-channel coming off today's high.  A bull-flag tells the sellers to sell off the highs and buyers to buy off the lows, focusing on traps and failures tomorrow.  Buyers will be looking for buying opportunities at the low of the channel and want to avoid buying into the high of the channel until you get a successful breakout-pullback on the way up to new highs and possibly last week's high at 47.12.  Sellers on the other hand, will be looking for opportunities to sell the high of the channel using buyer-failures or a STRONG break lower that can hold below the measured-move for a target going back to today's low. 

E-mini S&P is bullish and trading inside either a triangle or bull-flag this evening which tells the buyers to look for opportunities using failures at the lows and sellers to look for opportunities using failures at the highs.  The buyers have the edge going into tomorrow's session and will be looking for seller-failures at the lows or a strong breakout pullback through the highs if they really get this move going, while sellers will be looking for buyer-failures off the highs and a strong break down below the battle zone for a target back down at today's low.

Gold is bearish and trying to finish the move back to the trading-range where the day started and a recent strong move from the bears, combined with a bear channel tells the sellers to look for traps and failures at the resistance levels overhead for a potential measured-move back down to where the day started.  Buyers on the other hand, will need to see something strong enough to get back above the resistance trend-line and then hold a pullback for a move back to re-test the highs tomorrow.


Euro is bearish after a spike & channel completed its move and collapsed off the highs and now the sellers will be looking for another leg down with a target back at today's low and possibly the round number tomorrow.  The sellers have control, and with the strong move down we expect them to be selling the moving-average as well as looking for traps and buyer-failures up at the battle zone as well.  Buyers have no proof at this time so the only way they can be confident buying will be after a VERY strong break higher that can hold above the battle zone for a move back up to the highs tomorrow.

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Day Trading Gold Futures Wedge Pattern Breakout; SchoolOfTrade.com



Today we see Gold Futures catching a very nice run from both FOMC as well as continued bullishness in the overnight session leading into a very strong bull trend. This gives us clues that we need to be looking to buy only and only when we get a good chance to!

We formed a wedge in the morning session which had a strong one candle breakout that pulled back and once again closed outside of the wedge. This was the clue that it was a breakout pullback, just a bit extended is all.


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Market Psychology On Gold Futures Breakout Pause Morning; SchoolOfTrade.com



Today we come in to find Gold Futures with a big gap higher on the FOMC news with continued bullishness to the market. This gives us clues that we need to be looking to buy to the highs and try to stay out of sells.

The huge first candle had very little continuation which found a range for a very long while. In a range, we are looking for traps and buying low with the bull bias. Looking for sellers to get trapped in gave a ton of different opportunities today!


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Wednesday, September 21, 2016

Trade Plan for Thursday | SchoolOfTrade Newsletter 09/21/16


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"Success is a lousy teacher. It seduces smart people into thinking they can't lose."
Notes for Tonight’s Newsletter:
Markets are reeling after today's FOMC Announcement and we have some wide ranges to work with tomorrow which usually means big opportunities as well; Crude Oil is bullish and trading at the highs of two channels, E-mini S&P is bullish and trading at the highs of a channel, Gold is bullish and holding the mid-line of a bull-channel (which is a big clue), and the Euro is trading at the highs of a range going into Thursday's session.

Crude Oil is bullish and trading at the highs of two channels this evening which means buyers are waiting for a decent pullback off the highs and sellers will begin trying to find a top in what has been a strong bull market after the FOMC Announcement was made earlier today.  The buyers have clear control of this market right now, but trading at the highs is not the ideal place to look for buying opportunities, so bulls will be looking for a pullback to the lows of the channel, ideally all the way back in the correction zone of the spike & channel for a move back to the highs.  Sellers on the other hand, need to either gamble with trying to sell the overshoot of the channel or what for a more reliable opportunity after they can make a new lower-low and hold a pullback tomorrow on the way back down to the correction zone around 45.00.

E-mini S&P is bullish and trading at the highs of the channel after a strong push from the buyers which means buyers will be trying to use that strength to either look for a breakout-pullback above the channel-high or wait for sellers to try and reverse the move and look for failures.  Sellers on the other hand, have no proof of control so they need to avoid trying to call a top and wait for price to get back below support levels and hold a pullback or they will have to gamble with selling an overshoot of the channel highs.  The strength of this move higher tells us that we most likely won’t see a correction all the way back to the channel lows (although anything's possible after FOMC) so the most reliable thing to do is either wait for a pullback to the support levels below us or rely on a strong break higher for proof of the move to the double-up target overhead.

Gold is bullish and holding the mid-line of a bull-channel which is often a big clue that a deep pullback is about to occur and a possible bullish spike & channel gives the buyers a good idea of where the best opportunities will come if we do indeed get a nice correction off the highs.  The bulls have control of this market and they will be looking for opportunities at support levels in the correction zone, the low of the channel and possibly the battle zone if this market really falls apart after the FOMC 'sugar rush' wears off tomorrow.  Seller on the other hand, need to stay patient to see if this pullback holds, and if it fails they can look for a move down to the battle zone at 26 and possibly a move back to re-test today's low.


Euro is trading at the highs of the range this evening which means our goal will be to buy the lows, sell the highs, avoid the middle and focus on failures until we see a new trend develop tomorrow.  The buyers will be looking for a successful breakout to finish the measured-move and sellers will be looking for a failure to sell back down to the lows of the range.  The most important clue on this chart is the range, which means the channel and measured-move will act as support and resistance as this market rotates back and forth from high back to the low and vice versa.  Sellers would love to see the buyers get their measured-move and then sell back down to the lows while the buyers want to see a VERY strong push higher to negate the range and go hunting for the range expansion up at 12585 tomorrow.

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Market Psychology - Euro Currency Futures - Range Sentiment Morning; SchoolOfTrade.com



Coming in to the morning session of FOMC on the Euro to find a range forming very sturdily so far and we know what to do with that; buy low and sell high and try to stay out of the middle as much as we possibly can.

With the overall range tightening in the hyper weak bear trend, we need to be cautious around falling areas of resistance but when there are clues of failure, it is time to put the range trading hat on and fade the range highs and lows!

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Day Trading Euro Currency Futures FOMC Day Range; SchoolOfTrade.com



Coming in today with FOMC later in the day and most markets going very slow and sideways forming ranges all over the place. The most notable being the Euro respecting last nights newsletter levels VERY well forming a range around them.

This gave us a top side failure of range breaking back down under the 1.11900 area for a move back to new lows of the range before looking for buyers to take it back up once again!


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