Wednesday, January 20, 2016

Watching for Failure Patterns | Crude Oil, Gold, E-mini & Euro Futures 01/20/16

Click here to download today’s charts  (upload isnt working tonight)
“Don’t set your goals too low. If you don’t want much, you won’t become much.”

Notes for Tonight’s Newsletter:
Crude Oil is bearish in the long-term but a late-session bullish correction has the buyers back in the game ahead of tomorrow's inventory report and the most recent pullback gives us BIG CLUES for where we go tomorrow.  Sellers took control early in the session and completed their targets before the buyers grabbed control after lunch and pushed higher three times before the 4:30pm EST API# was released and we now have a DEEP pullback off the highs which tells us that the buyers need to hold this pullback for them to have a chance at hitting targets up at 29.60, 29.78, and 30.00 ahead of news at 11:00am EST tomorrow morning. 
If the bulls can’t hold this pullback the sellers are going to attack this market and try to push down to targets at 27.89, 27.56, and 26.93.  The big variable is the news tomorrow, so we will sit-on-hands from 10:45am through 11:15 to let the news volatility pass and then look to finish the session afterwards.

E-mini S&P is on a wild ride today with a parabolic wedge lower that was immediately bought up with the pushes higher before finally pulling-back and giving us an excellent opportunity to go lower tomorrow morning with the proper trigger. 
The sellers took control early in the session and gave us three legs down into a parabolic wedge before a beautiful breakout pullback to get long with three pushes higher from the buyers before overshooting the channel highs and overcorrecting back at the lows. 
The buyers are in a tough spot right here with 3 pushes higher into a climactic overshoot so you KNOW the sellers are waiting for them to fail so they can continue this bloodbath back down to the targets at 1840.0, 1818.0, and 1800.00.  If the bulls can hold this pullback we will look for a 3rd measured-leg back to the high of today's session.

Gold is bullish, however today's spike & channel ended just shy of the channel-highs after three climactic pushes higher which tells us the buyers are likely sitting on the sidelines until we see a correction early tomorrow morning and sellers will be drooling over a successful hold of the next pullback
The bulls had control with three pushes into a major measured-move this morning but we can see it fell short of completing the channel-rotation which tells us the sellers will be looking to send this price back to the channel-lows but the bulls will see this as unfinished business and will be looking for the sellers to fail at the moving-average for a shot to send this back to finish the job!

Euro is bearish with a spike & channel and possible trading-range this evening which means we will be planning for multiple scenarios tomorrow focused around the sellers holding the next pullback after testing the range lows at the end of the session today.  I think a lot of traders will have different opinions about this chart tonight, which is why PATIENCE and PROOF will be the key to PROFITS tomorrow. 
Sellers have the bias, but the test of the range lows tells us that if the bears fail to hold the next pullback this will trigger a 2-try-rule failure and we will see price run back to the highs of the range.  If the sellers can hold the next pullback, then the odds increase for a push down to the measured-move and a test of the range expansion support below.

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