Thursday, May 5, 2016

5 Trades for Non-Farm Payrolls Friday | Crude Oil, Gold, E-mini & Euro Futures 05/05/16

“Pressure either makes diamonds or dust…which one are you going to be?”

Notes for Tonight’s Newsletter:
Markets are all trending lower this evening ahead of Non-Farm Payroll News tomorrow morning; Crude, S&P and Euro are looking for short-term corrections while Gold appears to want to reverse the trend and push higher going into tomorrow's session.

Crude Oil is bearish this evening, but after a triple measured-move we see a channel-overshoot with is going to give the bulls a chance to grab control and start hunting for the highs again tomorrow. 
The bear channel tells us that sellers will keep trying to sell the highs, sell prior resistance swings, and keep trying to re-test the lows, but the overshoot of the channel low was immediately bought up by the bulls which is usually a very strong indication that a correction is likely in the near-term.  The combination of the triple measured-move and the double-down levels tell us this is a serious area of support and the prior measured-move (44.80) will be an area of resistance.  Sellers will be looking for buyers to fail at overhead resistance levels and buyers will be looking for the next pullback to hold for the signal that they can rely on buying pullbacks back up to resistance levels overhead.

E-mini S&P is bearish this evening and trading at the completion of a measured-move off today's highs.  The buyers haven’t shown us any reason to think they want control at this point, but the sellers have a rising support trend-line that they need to break before they will want to take price lower so we expect to see a 'trap-high' before the sellers take interest.  The bear channel tells us that sellers will be trying to sell the highs, sell at resistance levels overhead and keep trying to send price back to re-test the lows.  The buyers have the window they need to take control of this market because the measured-move and rising trend-line are both major levels of support so they need to either show some strength to break-down and go below the trend-line or they will wait for price to push higher so they can get 'short' at a higher price tomorrow.

Gold was bearish for the majority of the session today but a recent bullish reaction off the lows of a channel tells us to expect at least another leg to this move back to the highs of the bear channel tomorrow.  The 'minor' bear channel would normally tell us to look for 'traps' above resistance levels with a target back to the lows but we can’t ignore the strength of the bulls after this recent move back above the moving-average, which tells us to look for another bullish leg higher with targets at resistance levels up overhead before the sellers get a chance to sell the highs of a pending 'major' bear channel.

Euro is bearish and trying to complete a measured-move target down at 3800 but a recent trading-range tells us the bears might not be interested in selling this low so we will be looking for a correction back to the spike & channel 'correction zone' or a strong 'breakout-pullback' to complete the move tomorrow.  The spike & channel tells us to look for selling opportunities using buyer-failures at the resistance levels overhead with targets below at the measured-move and the double-down support levels.

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