Monday, April 4, 2016

Day Trading with Failures | Crude Oil, Gold, E-mini & Euro Futures 04/04/16

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Notes for Tonight’s Newsletter:
Today was 'Reaction Monday' which is the first trading day after last Friday’s Non-Farm Payroll Report and all eyes were on the Oil and Equity markets while Gold and Currencies seemed to pause ahead of FOMC news later this week.

Crude Oil is bearish and aggressively moving through key levels of support as it overshoots the low of a multi-day channel which tells us to look for a short-term correction before we do anything tomorrow.  We have a bear channel and a measured-move on the chart this evening.  There are two bear channels on the chart; the multi-day channel shows us we are overshooting the lows and the short-term channel tells us we just got the re-test after a correction, both of which open the door for the buyers to grab this tomorrow.  The measured-move at 35.85 was already completed and it appears that the sellers are hunting for the triple-measured-move down near $35.00.

E-mini S&P is bearish and a wedge on the chart tonight tells us there is a LOT of room to the downside but we're sitting at key support so we will be looking for a 'trap-high' for the most reliable trades tomorrow.  We have a bear wedge and a measured-move on the chart this evening.  The bear wedge tells us that sellers will be hunting for the 'finishing point' of the wedge which is down around 2043, but we can also see that the bears completed their measured-move at 2056.  The measured-move completion tells us to look for a correction higher to resistance before the next leg down, but there is a big BULLSEYE on the lows right now because it doesn’t look like the buyers did much with it.

Gold is range-bound at the lows with a short-term bearish bias this evening which tells us to look for failures to buy the lows but we need to wait for the sellers to try and fail first.  We have a trading-range and a bear channel on the chart this evening.  The range tells us to buy the low and sell the high of the range using failures and the '2-try rule'.  The bear channel is the big obstacle for the buyers right now because the sellers will want to sell the channel high and send it lower, so we will be looking for the bears to try and fail before looking for the next buying opportunity back to the high.

Euro is range-bound inside a triangle this evening which tells us to look for failures at the highs and lows of the range and wait for the completion of the triangle for a new trend direction.  The triangle appears to have a bullish tone this evening and a recent fake-break at the highs, telling us to expect price to attempt a move back to the lows where we assume there will be buyers waiting.  Triangles are similar to ranges in the way that we will buy the lows, sell the highs, and focus on failures.  The one thing that is different about a triangle is that the end of a triangle usually produces an explosive breakout and the 'finishing point' is considered support and resistance that can be used for a breakout pullback.

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