Monday, April 18, 2016

6 ‘Traps’ for Tuesday | Crude Oil, Gold, E-mini & Euro Futures 04/18/16



“There is no such thing as failure. There are only results, and how we respond to those results will determine our level of success.”

Notes for Tonight’s Newsletter:
Oil markets are trying to fill a big gap down from last Friday, the e-mini markets are trying to keep up with crude, gold is range-bound and the euro is trying to get its act together back to range highs tomorrow.

Crude Oil is bullish and rotating off the lows of the bull channel with a bullseye at the completion of a measured-move which tells us to look for trap opportunities on the way higher.  The bull channel tells us to look for rotation from the low up to the high, but there is a measured-move right on Friday's close which is likely going to be a big area of interest for sellers to enter the market as well.  Buyers will be looking for price to get (and stay) above the measured-move, or find bear-traps at the swing lows so they don’t have to buy directly into that resistance area.  Meanwhile, the sellers have a tough job right now because they either need to be aggressive and sell into the measured-move, sell the channel high, or they need to stay patient for price to turn bearish after a lower-low and hold a pullback to try to make a run back at support levels below.

E-mini S&P is bullish but the extreme strength, combined with a spike & channel tell us most buyers are already in this move and the wise buyers will be waiting for bear-traps below prior swings tomorrow.  The bull channel has a grind-break, which tells us to look for a 'trap-low' before it pushes higher.  The spike & channel tells us to look for a pullback to prior swings below pushing higher, and the double-up resistance tells the buyers they need to wait for price to either pullback or break higher if they want to avoid buying into resistance here.  Buyers would LOVE to see a bear-trap at 82.50 or back to the measured-move (support) at 79.50 so they can get a cheaper price to buy.  Meanwhile, the sellers will be waiting to see if they can get price below the 79.50 for a possible reversal back to the low of today.

Gold is bearish but trading at the lows of a range and channel this evening which tells us the sellers to stay patient for a 'trap-high' before looking for the next selling opportunity because the bulls will want this in the short-term.  The trading-range tells us to look for rotation back to the highs, and the bearish spike & channel tells us the same thing, back to the channel highs.  There is also a flat bull channel with a possible double-overshoot which is a BIG buy-signal for the bulls.  Bulls want to see the sellers try twice at these lows so they can buy the lows of the channel and the range.  Sellers want to stay patient because they can’t sell at the lows, they are waiting for a 'trap-high' to sell it back down or they need to wait to sell the highs of the range later in the session.


Euro is bullish and trading at the lows of a bull channel but the big clue comes from a bull-flag that tells us where the most reliable trading will be tomorrow.  The bull channel tells us to buy the lows and take profit at the highs, but we can see the bull-flag getting in the way.  The bull flag says to buy the lows of the channel, or wait for a breakout pullback above the channel high on the way up to a target at the measured-move.  Buyers want to see the sellers fail at the lows of the flag, or they need to wait for a close above the highs of the flag and then buy a pullback on the way back to the channel highs.  Meanwhile, the sellers will be looking for opportunities to sell the highs of the flag, look for a double-overshoot at the highs of the bull channel, or find a way to hold the next pullback for a full trend reversal.

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