Monday, April 25, 2016

4 Channels for Tuesday | Crude Oil, Gold, E-mini & Euro Futures 04/25/16

“In warfare there are no constant conditions.  He who can modify his tactics in relation to his opponent will succeed and WIN.” – Sun Tzu – The Art of War.

Notes for Tonight’s Newsletter:
Crude Oil is bearish this evening but we're trading into the measured-move target which means we likely only have one more leg down before the sellers take their profit and wait for a bullish correction higher tomorrow possibly back to the highs of a pending bear channel.  The short-term bear channel tells us sellers will be trying to re-test the lows at 42.58.  The measured-move has already been tested, and we typically see at least two tests before the sellers give up control so we expect another run back to the lows before the sellers let this price out of their control tomorrow.  For the buyers, they will be shooting for the highs of the pending bear channel as a target in the short-term and a possible run back to the highs at 44.04 if the sellers can’t hold the channel highs after the correction.

E-mini S&P is bullish on the way to completing the measured-move this evening which tells us to keep looking for buying opportunities but we're also running into resistance overhead which will likely cause the buyers to look for a 'trap-low' tomorrow before we see this move completed.  The bull channel tells us buyers will likely keep trying to send this price to the measured-move, and once completed we expect to see a second leg from the buyers to complete a double-top.  We also have a pending bear channel coming down as overhead resistance which tells us the sellers will be trying to sell up here so the double-top into the measured-move will be easy 'bear-traps' as well as an opportunity for the patient sellers to get a reversal off the highs back to the lows of the channel.  There are two trading ranges on the chart; the small range will likely act as support for the buyers who will be looking for a way to buy without buying into resistance.  The larger range may be the most important clue tomorrow and may send price 'rotating' back to range lows after the buyers complete their measured-move.

Gold is bullish and coming off an overshoot of a bull channel high so we expect to see price rotate back to the channel lows before trying to rotate back to the highs tomorrow but we can also see 'falling resistance' overhead which may play a key factor in how successful the buyers are tomorrow.  The bull channel has an overshoot which tells us to look for an overshoot at the channel lows as well.  The trend-line coming down overhead tells us the buyers will either be looking for a 'trap-low' at support below or they will need to a breakout-pullback above the trend-line so they can use it support on the way up to channel highs and a possible 'double-up' or measured-move target later tomorrow.

Euro is bullish with a spike & channel this evening which tells us the buyers will be looking for opportunities using a 'trap-low' back at support levels below or pullbacks if they continue this move to rotate back to the channel highs.  The bull channel tells us the buyers will be looking for a second leg higher tomorrow, while the spike & channel tells us to look for a 'trap-low' below the channel around the 'correction zone' before the buyers finish this move higher.  The measured-move will serve as a target for the buyers tomorrow and will also be a likely for sellers to look for a trend reversal.

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