Wednesday, April 13, 2016

Trading with Ranges | Crude Oil, Gold, E-mini & Euro Futures 04/13/16



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Notes for Tonight’s Newsletter:
Markets are reacting to the 'beige book report' released this afternoon from the Fed which paints a very rosy picture for the US economy, which is pushing the dollar and equities higher, oil, gold, and euro lower and we have some very interesting opportunities on the chart tonight.

Crude Oil is range-bound and bearish this evening, but sellers are trading at the lows of a bear channel so we expect to see profit-taking ahead of a bullish correction before we head lower again.  We have a trading range, bear channel and three legs down this evening.  The trading range tells us to use 'rotation' and the '2 try rule' to buy the lows and sell the highs of the range.  The bear channel tells us to sell the highs and take profit at the lows, and three legs down tells us to expect a bullish correction back to resistance levels overhead. 

E-mini S&P is bullish with a spike & channel, but the rising wedge has been completed to a measured-move so we can expect a bearish correction back to support levels below for the most reliable buying opportunity tomorrow.  We have a bull wedge, spike & channel, and a measured-move on the chart this evening.  The bull wedge is a great buy-signal for buyers until we get to the completion point and that turns into very strong resistance.  The spike & channel tells us to buy the lows of the channel which means the buyers will be taking profit at the highs and waiting for a correction back to the lows.  The spike & channel also provides a 'correction zone' starting at 2067 for the move back to the highs tomorrow.  The measured-move has been completed which tells us to expect buyers to take profit, but in most situations we see a second attempt to test the measured-move so a 2-legged correction is expected off the highs and then a re-test back to the highs tomorrow at some point.

Gold is bearish and trying to re-test today's low, but a short-term channel tells us to expect a bullish correction before the next leg down on Thursday.  We have a major bear channel, minor bear channel, and consolidation zone to work with this evening.  The major bear channel tells us the target is back at the lows at 1241.4 and the measured-move at 1234.9 tomorrow, but the minor bear channel shows us trading at the lows so we can expect 'rotation' back up to channel highs before the next leg down.  There is a small consolidation area overhead as well, which has been repeatedly used as resistance today and may be used again in the short term for sellers to get a better price as well as give the buyers a line in the sand to find support if the market reverses tomorrow.


Euro is bearish with a bear channel and re-test lower, but with three legs down into a trading-range we can expect sellers to see this market is 'too cheap' and will want to wait for a bull-correction before the next leg down tomorrow.  We have two bear channels, three legs down, and a trading range to work with this evening.  The original bear channel continued through a correction which tells us sellers will be taking profit down here.  The larger bear channel is trying to 'rotate' from the high down to the low but there is a trading-range getting in the way.  The range tells us to look for selling opportunities using buyer-failures at the highs or a breakout pullback at the lows if this market tries to push lower before a correction.

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