Monday, May 16, 2016

Waiting for Traps | Crude Oil, Gold, E-mini & Euro Futures 05/16/16

“Success seems to be connected with action. Successful people keep moving. They make mistakes but don’t quit.” 

Notes for Tonight’s Newsletter:
Crude Oil is bullish and trying to finish rotation back to the highs of a 'hidden channel' this evening but price is quite expensive up at the highs so we can assume the wise bulls will be looking for a trap back at prior swings or a strong breakout-pullback above 47.85 if they are going to buy this market. 
The bulls had control all morning with a spike & channel and after a very shallow pullback off the highs the buyers were able to re-test the 'double-up' resistance to finish the session.  Buyers will be looking for a strong move higher to give them confidence that the market is accepting such an expensive price or else they will wait for a cheaper price back at prior support levels below.  Sellers need to be careful right now because we can assume that such a strong push higher today will have swing-buyers interested at all the prior swing levels until we can get and STAY below 47.11.

E-mini S&P is bullish with a spike & channel this evening which tells the buyers to stay patient for the most reliable opportunities at prior levels of support before a re-test of the highs tomorrow.  The bulls had control for the entire session today, and on the first pullback to the moving-average we see buyers trying to failing to keep the move going which is a clear sign that price is considered too expensive for buyers and they will wait for a 'trap' at prior support levels below.  Sellers may be able to find short-term opportunities during a measured-correction off the highs but they need to be careful because the swing-buyers are going to be hunting for a re-test of the highs and the triple measured-move overhead.

Gold is bearish after collapsing off the highs earlier today but the way the buyers appear to have bought the test of the lows gives us clues that this move lower may be nothing more than a 'trap' to get the sellers chasing and the buyers a much cheaper price to buy going into tomorrow's session.  The buyers had control for the first half of the session today and then appear to have lost interest when it pulled-back to the moving average which allowed the sellers to send price all the way back to the lows of the range.  Looking closely at the test of the lows you can see there was no follow-through from the sellers which leads us to believe that the buyers are interested once again at this lower price.  We assume sellers will try to sell the high of the 'hidden channel' and that is where the buyers will be looking to enter going back to the highs.  Sellers need to see the buyers fail when we get back to the channel highs and the buyers want to get above the channel highs and hold as support for confidence going back to the 1290.4 highs.

Euro is bullish in the short-term but the candlesticks don’t give us much confidence that today's move off the lows isn’t being sold as it goes higher by the swing-sellers trying to get a better price after last week's big move lower.  We can easily see a bull channel pushing higher today, which would tell us to look for buying opportunities back to the range-highs in the short-term, but looking at the candlesticks closely we see that every move higher was sold.  Furthermore, looking left you can see that sellers have been selling just above each swing-high as well, giving us reason to believe the sellers are scaling into the move higher and looking for a re-test of the lows.  The falling resistance trend-line overhead is the big key for the buyers; they need to get and stay above that trend-line if they have a chance to make a move up to the 'double-up' target overhead.  if the sellers hold this next pullback we can then assume we will be targeting the lows again.

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