Tuesday, May 17, 2016

3 Channels for Wednesday | Crude Oil, Gold, E-mini & Euro Futures 05/17/16

“The best way to predict the future is to create it.”  – Joseph James

Notes for Tonight’s Newsletter:
The rollercoaster continues this week in the futures markets; Crude Oil is bullish going into major news, E-mini S&P is bearish but expecting a big correction after a double-overshoot of the channel, Gold is bullish and trying to finish channel rotation back to the highs while the Euro is trading inside a megaphone and headed lower.

Crude Oil is bullish and trading at the highs of a channel which tells the buyers to look for opportunities back at the lows or wait for a breakout-pullback to expand the channel higher tomorrow.    The buyers won't be interested in buying into the measured-move and channel-high resistance so the only two options would be to get a breakout-pullback above the measured-move on the way up to the expanded-channel high, or look for buying opportunities back at channel lows and support levels below.  We have contract rollover tomorrow so volume is expected to be lighter than usual and with major news at 10:30am EST we won’t be surprised to see this market pull-back sharply so buyers can get a cheaper price heading into news.

E-mini S&P is bearish but a double-overshoot at the lows of the channel gives the buyers a window of opportunity to send price back to the channel highs and most likely the next major swing level overhead before the sellers take interest again.  The measured-move is the line-in-the-sand right now for the buyers, who will be looking for a move back above the channel high to the major swing at 2052.25 where we can then assume the sellers will start looking for new opportunities back down to re-test the lows at 2037.  The bear channel tells us that sellers will be waiting as this price rises higher, and the buyers will be looking for a breakout-pullback above the channel-high to get the window they need to push higher.

Gold is bullish and trying to complete rotation back to the high of a channel this evening and a small trading-range gives the buyers a great opportunity for a breakout-pullback or a 'trap lows' on the way back to the target overhead.  The bull channel may end up being a triangle if the bulls can’t get through the overhead resistance trend-line so keep an eye on rotation back to the lows if that happens and there is a measured-move target waiting overhead.

Euro is trading lower this evening and a failed bull-flag combined with a megaphone gives the sellers and easy target back at the range lows tomorrow.  The Euro is ugly as sellers continued to scale into this move after last week's run lower.  The recent bull flag has failed which means the target is back at the beginning of the move which will likely be extended down to the low of the megaphone or possible bear channel tomorrow.

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