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Notes for Tonight’s Newsletter:
Crude Oil is bearish with a 'descending wedge' that is un-tested, but we have a rising support trend-line between the sellers and their target so we will be watching a key area of support below us tomorrow. We have a head-fake at the open, a bearish wedge, and rising support on the chart this evening. The head-fake at the open tells us this market will most likely try for a 2nd leg down, and we will use the measured-move for the target. The bearish wedge tells us this short-term correction was expected and sellers will try to re-test the low at 38.87 before trying to test the finishing-point of the wedge which is also the previous day's low at 38.34. The rising support channel is an obstacle for the sellers and will most likely be the biggest variable for direction tomorrow. Aggressive sellers will be looking to sell at the highs of the channel while more conservative sellers will wait for more proof after a break of the channel lows. Buyers will be looking for opportunities at the channel lows and will be watching for the sellers to fail for a move back to the highs at 40.14 tomorrow.
E-mini S&P is range-bound with a slight bearish bias this evening which tells us exactly where the most common 'traps' will be tomorrow and how to avoid them. We have two channels and a triangle to work with this evening. The bear channel tells us we are rotating off the highs with a target back at the lows, and the bull channel was broken and the sellers used it as resistance without allowing the buyers to re-test the highs which is why we have a bear bias this evening. The triangle gives us rising support and falling resistance which will be where the 'traps' are most likely tomorrow. Sellers want to sell the highs of the channel or wait for the price to break down and use the lows of the triangle as resistance on the way back to the lows at 2022.and 2016.00. Buyers want to see those sellers fail at the lows of the triangle, or break the highs of the bear channel and use the highs as support on the way back to the highs at 2034 and 2039.
Gold is bullish after a head-fake at the open this morning but falling resistance will most likely cause the buyers to wait until they see proof or enough room to buy this market tomorrow. We have a head-fake at the open, a bull channel, trap-low, and falling resistance on the chart this evening. The head-fake at the open clearly fooled the sellers earlier in today's session and will give the buyers confidence to push price higher with a 2nd leg up to a measured-move target overhead. The bull channel has been broken which tells us the market's inertia will take over and buyers will keep trying to re-test the highs at 1223.2 and the PHOD at 1224.3. The trap-low is a perfect opportunity for the buyers to get in at a low price on the way back to the highs, but the falling trend-line acts as resistance which will keep the wise buyers away from buying here and they will look for a lower price or a breakout-pullback to new highs for the SAFE entry point.
Euro is bullish and rotating back towards the lows of an un-tested channel which tells us to look for buying opportunities with bear-traps at some key support levels waiting for us below. We have a bull channel and a measured-correction on the chart this evening. The bull channel is 'un-tested' which means it will likely surprise people at the lows and buyers will look for bears to try and fail around the lows for a move back to the highs. The measured-correction will make for an excellent area to look for the bear-trap, and the GAP from this weekend may be exactly the area they use to send it back higher. Buyers want to see price pull back into these support levels below and use seller-failure to buy back to the highs, while the sellers want to see the buyers fail and make sure we hold the lows of the channel as resistance overhead before trying to send price back to the lows.
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