Tuesday, April 19, 2016

Trading with Trend Channels | Crude Oil, Gold, E-mini & Euro Futures 04/19/16

“The meeting of preparation with opportunity generates the offspring we call luck.”

Notes for Tonight’s Newsletter:
Crude oil continues to trend higher, although its 'shadow' the S&P appears to be taking a nap this evening, while the Euro and Gold both appear to be ready for more buying opportunities tomorrow.

Crude Oil is bullish this evening, but a big overshoot of the channel high tells the buyers to stay patient for 'bear traps' below the channel lows tomorrow.  We have a bull channel, spike & channel, and a measured-move to work with this evening.  The bull channel has an overshoot so we want to get an overshoot at the lows for the most reliable trades back to the channel highs.  The spike & channel is testing the 'correction zone' but the bulls don’t appear to be very interested at this time so we will be looking for a 'trap low' for the best trades back to the highs tomorrow.

E-mini S&P is range-bound and trying to finish the rotation back to the highs of the range this evening but a recent wedge tells the buyers to look for a test of the 50% level before buying it.  The trading-range tells us to look for 'rotation' from the low up to the highs, then back to the lows.  The range also tells us to use the '2-try rule' to look for failures to sell the highs and buy the lows.  The wedge is bullish and tells us to expect price to pullback to support levels below before it pushes higher to finish the move back to the highs.

Gold is bullish with a rising wedge this evening but we are currently in 'correction mode' which tells us buyers will be scaling-into new positions at support levels below us tomorrow.  The bullish wedge already broke and re-tested the highs which has resulted in a new bear channel and a short-term measured-correction that feels 'tired' as it pulls back, giving us clues that this move lower is likely off the buyers taking profit rather than the sellers trying to reverse this move.  The buyers will likely be looking for opportunities at each support level as this price moves lower with a target up at the highs (58.6) and measured-move (61.1) tomorrow.

Euro is bullish and trading at the lows of the bull channel and trading-range this evening which is a beautiful area for the buyers to start looking for the correct trigger to buy going back to the highs.  The bull channel tells us to buy the lows and take profit at the highs, as well as look for bear-traps at prior swing-lows.  The range is bullish and tells us to expect rotation back to the highs, and to use the '2 try rule' to buy into seller-fail at the lows.  The measured-move level will act as support and resistance and we have a triple measured-move waiting as a target for the bulls.

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