“Do not judge each day by the harvest you reap, but by the seeds you have sewn.” – Robert Louis Stevenson
Notes for Tonight’s Newsletter:
With major news on the schedule for this evening and tomorrow morning we can easily see a calm before the storm; Crude Oil and the S&P are both trying to turn directions from bearish to bullish while Gold and Euro are both strong to the down-side ahead of tomorrow's session.
E-mini S&P is bullish after sellers appear to have failed to finish the spike & channel correction back to the lows but the recent price-action tells us this could go either direction so we're looking for the next good 'signal' to know where this price wants to go next. The bear spike & channel has already tested the 'correction zone' which should have been sold off back to the lows of the range (48.00) and the lack of follow-through is a big clue that the bulls have won this short-term battle. The bull channel shows price trying to rotate off the lows with a target back at the highs and tells us to look for continuations as it goes higher, or traps at prior swings for the most reliable buying opportunities because there is a measured-move waiting overhead as a target.
Gold is bearish but finished the day inside a range just below the measured-move which tells the sellers to be patient for a 'trap high' above the range or a strong breakout-pullback on the next move lower. The bear channel tells us to sell the highs and take profit at the lows, but the trading range tells us to look for 'bull traps' at the highs for the most reliable selling opportunities or they need to see a STRONG breakout-pullback below the low of the range. The measured-move was already achieved today and now the sellers are trying to use it as resistance down to a triple measured-move back at the lows of the channel.
Euro is bearish and trading lower after testing 'reversal line' resistance above the highs of a bear channel which tells the sellers to be looking for rotation back to channel lows and a measured-move target below. The bear channel tells us to expect rotation from the high down to the lows, the reversal-line will serve as major resistance overhead and the measured-move (and double-down) will be excellent targets for the sellers tomorrow, assuming the major news from China doesn’t shake things up too badly overnight.
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