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Notes for Tonight’s Newsletter:
Markets are a bit choppy ahead of the Holiday weekend; Crude Oil and Gold have some good trends going, while the E-mini S&P and Euro are trading inside of narrow ranges as we go into Tuesday's session.
Crude Oil is bullish and trading to complete rotation up to the high of a channel but a triangle pattern tells us they may look for a pullback before this price finishes the job. The sellers took control at the beginning of the session but as of 10am EST the bulls had reversed the trend with strength and the buyers are currently trying to re-test the highs again. The major bull channel tells us the buyers will try to finish rotation back to the highs where the measured-move is waiting as a target and the minor bull channel will be used as additional short-term support and resistance on the way up. The big variable will be the triangle because price is just above the highs and appears to be stalling out (candle wicks) which tells us that the bulls may want to buy this after a pullback to the highs of the triangle or look for a 'trap' below the lows before they send this price higher. Buyers want to see this move continue with strength or they will need to wait for a strong signal after a pullback to support. The short-term sellers will be waiting to see if the next pullback fails and will be targeting the low of the triangle and possibly the low of day at 47.40.
E-mini S&P is balanced and trading inside one of the narrowest ranges we've seen all year which tells us to look for failures at the highs and lows of the range until this market finds a direction this week. When we find a market trading sideways like this we focus on range-rotation, failure set-ups, and the pendulum swing for our targets going in the opposite direction. As price goes lower we look for seller-failure at support levels below and look to buy back to the original range, and vice versa at the highs.
Gold is bearish and coming off the highs of a channel after a beautiful 2-legged-correction off the lows which tells us sellers will definitely be looking for rotation back to the lows but they will need to see how price reacts to the rising support trend-line before they fully commit. The bears had control of the market for the entire session today with a strong push lower before taking profit and allowing the bulls to take short-term control during a picture-perfect 2-legged-correction back to the highs of a pending channel. The rising support trend line tells the sellers to look for a breakout-pullback or they will need to wait for price to 'trap high' up around a measured-correction lever overhead for the most reliable way to sell back to the lows. Buyers will be looking for a bullish breakout-pullback above the channel highs as well but they need to be careful because the bears will be looking for buyer-failures at the highs for an easy selling opportunity back down.
Euro is still trading inside the same range from last week which means our plan hasn’t changed; we will continue looking for failure set-ups at the highs and lows of the range for the best opportunities until this range finally breaks down. We don’t see this very often where a range stays in-tact for more than 2 trading sessions which tells us to be looking for a strong breakout possibly tomorrow but in the meantime we will keep using rotation, failures, and the pendulum swing for the most reliable trades tomorrow.
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