Wednesday, February 3, 2016

Avoid these Traps | Crude Oil, Gold, E-mini & Euro Futures 02/03/16

“The meeting of preparation and opportunity generates the offspring we call luck.”

Notes for Tonight’s Newsletter:
Crude Oil is bullish but after a huge move higher on today's news we see the market as very expensive at the highs of the channel and a completed measured-move which tells us to wait for a bearish correction for a cheaper price to buy.  Today's inventory report sent prices higher this morning with a bull wedge that broke, re-tested and finished with a micro spike & channel which shows extreme strength for the buyers, but if you zoom out and look left you can see this is a very interesting area that has been tested before, which tells us there was a purpose to the move today and buyers will want to wait for a deep correction before buying more.  Sellers are looking for buyers to fail at the highs and then they need to hold a pullback to take control back to the support levels below.

E-mini S&P is bullish with a spike & channel but we are at the highs of today's range which tells us the buyers may struggle to push this price much higher.  Today is one big trading range and we are right at the highs which tells us buyers will be taking profit and sellers will be entering 'short' here.  We also see the recent spike & channel for the bulls has already corrected lower telling us to expect two measured legs higher in the short-term.  Buyers want to see a breakout pullback that holds above the range highs.  Sellers want to see the highs hold as resistance and the buyers fail on the next pullback to sell these highs. 

Gold is bullish with a spike & channel that appears to be ending in a range this evening which tells us to expect the buyers to try 2 legs higher tomorrow, but if they fail we will wait for a correction back to range lows for the next opportunity.  The bulls had clear control of this market today and they finished with a spike & channel that has an overshoot, undershoot, and an attempt to push higher which appears to form a range.  The overshoot appears to have been 'exhaustive' for the buyers which tells us to be patient for a correction back to range-lows, but if the bulls show strength we can expect 2 more legs higher before this market calls it quits.

Euro is bullish with the potential to make one more leg higher, but with 3 pushes into an undershoot of the channel we expect buyers to take profit and wait for a correction to a cheaper price before they buy more this week.  The Euro made a big push higher today, and it still has another leg to make, but with so much profit on the table for the buyers we will expect them to take some profit here.  We also see that the Euro has closed above the 200ema on the daily chart which means tomorrow is going to be 'PROVE IT' time for these buyers, and looking at today's chart we can see PLENTY of opportunity for the bears to send this back to the lows from today if this correction turns into a reversal.

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