Tuesday, March 1, 2016

Trading Range Strategy | Crude Oil, Gold, E-mini & Euro Futures 03/01/16

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Notes for Tonight’s Newsletter:
Crude Oil is bullish trading inside a range and at the lows of a bull channel this evening which tells us to look for buying opportunities using bear-traps at the lows tomorrow.  We have a trading range, bull channel and the API news candle to work with this evening.  The range tells us to look for rotation from low to high and to use the 2-try-rule for bear-traps at the lows.  The bull channel tells us to use rotation from the low to the highs looking for buying opportunities at the lows, and the API# which came out at 4:30pm EST this afternoon was a strong bear candle which tells us this will be resistance as those sellers have stops located just above and they will likely defend that area when it comes back to test it tomorrow.

E-mini S&P is bullish this evening but with three legs higher and a completed 'double-up' off today's opening range we see this market way too expensive to buy and we will wait for a 2-legged correction back to support before we buy more.  We have an un-proven bull channel, a spike & channel, double-up and a triple measured-move to work with this evening.  The un-proven bull channel doesn’t look great, but will give us some much-needed support levels to work with tomorrow.  The spike & channel tells us to wait for a 2-legged correction back to the base of the channel.  The 'double-up' tells us just how over-extended this price really is based on the opening range this morning, and the triple measured-move gives the bulls something to shoot for if they want to keep this price moving higher.

Gold is range-bound this evening and the bears have a successful breakout which tells us to look for range-rotation and use the '2-try rule' for the most reliable trades tomorrow.  We have a trading-range, bear channel, and bull channel to work with this evening.  The trading-range is most important clue, and will be used as a price-magnet tomorrow using the 2-try rule for range-rotation back and forth between the range levels.  The bear-channel helps provide support and resistance levels both above and below, and with a recent test of the channel lows we now expect rotation back to the highs.  The short-term bull channel is the big obstacle right now for both buyers and sellers, and it will act as important support and resistance on both sides.

Euro is range-bound and trading off the lows on the way to test the highs this evening which tells us to buy the lows, sell the highs, and look for failed breakouts tomorrow.  We have two separate ranges on the chart this evening which have been combined into one larger range to make things a little more interesting tomorrow.  Trading ranges tell us to use rotation from high to low and back to high, with the most reliable trades always being FAILURES.  We will use the '2 try rule' to qualify the breakouts to expansion levels above and below and use the original range as a price magnet tomorrow.

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