Tuesday, February 16, 2016

Trading Range Strategy for Wednesday | Crude Oil, Gold, E-mini & Euro Futures 02/16 /16

“If you don’t set a baseline standard for what you’ll accept in life, you’ll find it’s easy to slip into behaviors and attitudes or a quality of life that’s far below what you deserve.”

Notes for Tonight’s Newsletter:
Crude Oil is bearish with a spike & channel and possible major channel to work with tomorrow which tells the sellers to stay patient for a bullish correction before looking for more opportunities tomorrow. Sellers will be looking for price to test resistance levels overhead and will look to sell into buyer-failure for the most reliable trades short.  Buyers want to see a trap-low and seller-failure, or a new higher-high and hold the pullback for a short-term push back to the spike & channel correction target overhead.

E-mini S&P is range-bound this evening with a possible bullish spike & channel that will tell the story for tomorrow's trading opportunities.  The session ended with a spike & channel but look closely and you can see the most recent attempt to complete channel-rotation has failed which makes this move appear to be stalling at the highs of the range.  Buyers want to see the spike & channel correction level hold at 1884.25 followed by a STRONG breakout pullback through the highs.  Sellers want to see the 1884.25 area FAIL to hold as support which will then send price rotating back to the lows of the range.  If we can get to the lows of the range we expect to see buyers at the lows, and again at the gap-fill at 1865.00.

Gold is range-bound and trading at the $1200 round-number as it completes the rotation back to range lows, and our plan will be to use the range for trading opportunities tomorrow.  Buyers are looking to buy the lows of the range using seller-failures, and sellers will be looking for opportunities at the highs using buyer-failures.  We will be watching the '2 try rule' to make sure the sellers finish the job back to the lows because if they fail to complete rotation we can expect the buyers to run this back to the highs.

Euro is range-bound and rotation higher off the lows which tells us exactly where to be looking for TRAPS and big opportunities tomorrow.  We can see the market was bearish going into this range which gives a slight edge to the bears selling the highs of the range tomorrow, but the buyers should have the opportunity as well as this market pushes back to re-test the range high at 1956.  Buyers are looking for seller-failures on the way up to the range highs, and the sellers have to be patient to wait for buyer-failures up at the highs.  If we leave the range, we will be watching the '2-try rule' to see where we go next.

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