Monday, May 2, 2016

Trading Triangles on Tuesday | Crude Oil, Gold, E-mini & Euro Futures 05/02/16

“You gain strength, courage and confidence by every experience in which you stop to look fear in the face.”  - Eleanor Roosevelt

Notes for Tonight’s Newsletter:
Markets are volatile as we begin the month of May; Crude Oil is bearish inside a flag, E-mini S&P is bullish at the highs of a channel, Gold is bearish with an undershoot of the channel lows, and the Euro looks quite bullish as it tries to complete a triple measured-move from earlier today.

Crude Oil is bearish with a wedge and measured-move to work with this evening which tells the sellers to be looking for traps at overhead resistance levels for the most reliable selling opportunities tomorrow.  The bear wedge gives us a great medium-term target for tomorrow, but 'double-down' support tells us many of the sellers will take profit which will give the buyers a chance to send price higher in the short-term.  The bear-flag at the end of the day tells sellers to look for opportunities using traps at the highs and breakout-pullbacks at the lows and they have targets waiting at the measured-move for the next leg down.

E-mini S&P is bullish and trading at the highs of a bull channel this evening which means sellers will be looking for reversal opportunities with an overshoot and buyers will stay patient for seller-failures back at channel lows.  The bull channel tells us to wait for buying opportunities at the lows of the channel, while the sellers may see a double-overshoot at the channel highs for a scalp back down to the lows before we get there.  The measured-move will act as support for the buyers, and we dont want to forget about the previous trading-range which will be an easy location for buyers to look for bear-traps to get a cheaper price on the way back to re-test the highs.

Gold is bearish with a triangle pattern on the chart this evening which tells the sellers to look for 'bull traps' at the resistance levels overhead on the way down to target at the end of the triangle and possibly a full measured-move completion.  The bear channel has an 'undershoot' of the lows which tells us to expect an 'overshoot' at the highs.  The triangle is bearish so we will be looking for buyers to try and fail above the highs for selling opportunities back to the lows, and the measured-move will act as an easy medium-term target for the sellers tomorrow.

Euro is bullish and trying to complete rotation from the low up to the high of the channel evening which means buyers are looking for pullbacks on the way to the triple measured-move or they can wait for seller-failure below the lows if we get an overnight correction.  The bull channel tells us to look for rotation from lows up to the highs as well as 'traps' below prior swings if sellers try to take it lower.  The measured-move will be key support if we can stay above it, but it will become resistance after a correction so both sides of the market will be paying attention and the triple measured-move is a firm target for the buyers if price keep pushing.

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