Thursday, March 17, 2016

6 Trades for Quadruple Witching | Crude Oil, Gold, E-mini & Euro Futures 03/17/16

“You must know that in any moment a decision you make can change the course of your life forever: the very next person stand behind in line or sit next to on an airplane, the very next phone call you make or receive, the very next movie you see or book you read or page you turn could be the one single thing that causes the floodgates to open, and all of the things that you’ve been waiting for to fall into place.”

Notes for Tonight’s Newsletter:
Crude Oil is bullish with a lot more room to go higher, but we're trading at the highs of a bull channel which means buying up here is risky so we're looking for traps.  We have a bull channel, measured-move, and rising wedge this evening.  The bull channel puts us right at the highs, and our goal is to buy the lows of the bull channel, so this is assumed very aggressive to be buying up here.  The measured-move was reached but didn’t seem to stop the buyers so we expect an attempt at a triple measured-move, which also lines-up with a double-up from this morning's opening-range.  Lastly, the rising wedge is the biggest reason why the buyers have room to push higher, with a big target sitting at the 'point' of the wedge. 

E-mini S&P is bullish but the completion of a triple measured-move at the highs of a bull channel tells the buyers to take profit and wait for a correction back to the channel lows before they buy more tomorrow.  We have two channels, a triple measured-move, and a bull flag to work with this evening.  The long-term bull channel is un-proven, which gives us a great opportunity for a 'first test' off the lows, so buyers will want to stay patient.  The short-term bull channel has recently broken which tells us buyers will likely try to re-test the highs, but the triple measured-move tells us the bulls will have a challenge to go much further because there will be sellers waiting above 2036.75 to fade the highs.  The bull flag is another clue that buyers will try to re-test the highs, but it also tells the sellers to keep an eye on a failure.

Gold is bullish but a failing flag pattern is telling us they may be waiting for a deeper pullback so we're looking for bear-traps at key support levels before buying more tomorrow.  We have spike & channel, trading range, and a bull-flag on the chart this evening.  The spike & channel from yesterday broke and re-tested the highs, and usually that produces a second leg higher but it clearly failed.  The bull flag looks 'tired' right now because they don’t typically last this long, and with three pushes lower this is a critical point for the buyers to take this higher now.  The trading range is an easy place to look for traps at the lows if the flag fails.

Euro is bullish with a triangle and trading range this evening which gives the buyers plenty of locations to look for bear-traps tomorrow.  We have a bull channel, trading range, and a triangle on the chart this evening.  The bull channel clearly tells us the bulls have control, but we can see they had their opportunity to re-test the highs and backed-off... price must be too expensive here.  The trading range has a bull bias so we know to look for traps at both sides of the range and use the 2-try rule.  The triangle is the most important piece of information because it gives us a timeframe to work with until we know traders will react.

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