Wednesday, June 29, 2016

4 Traps to Avoid Thursday | Crude Oil, Gold, E-mini & Euro Futures 06/29/16

“Strength does not come from winning. Your struggles develop your strengths. When you go through hardships and decide not to surrender, that is strength.” –Arnold Schwarzenegger

Notes for Tonight’s Newsletter:
Markets are trending well going into tomorrow's session and we continue to see more signs of opportunities post-Brexit and pre-holiday weekend; Crude Oil, S&P, Euro and Gold are all looking bullish this evening which means something's gotta give and we have the plan to watch for Thursday's session.

Crude Oil is bullish and trying to re-test the highs after today's inventory report sent prices racing back to $50/barrel; As expected, the bulls had control for the entire session today with a bull spike & channel that 'trapped-low' before shooting through the highs all the way up to the price-magnet at $50.  We can see that buyers took their profit at the $50 and sellers appear to have aggressively sold as well which finished the session with a strong bear leg down that we assume will give the sellers a reason to try a second leg back to the 'battle zone' down at $49.  The buyers want to go back to $50 and the most reliable trade will be with seller-failure after this strong move lower.  The sellers need to hold this next pullback and will be hunting for the $49 level below where we assume more buyers will be waiting.

E-mini S&P is bullish after completing a bull wedge on the way back to its pre-Brexit levels from last week; The bulls had firm control for the entire session today with an aggressive bull wedge that successfully achieved its objective and pushed right through the target with what appears to be an exhaustive end of the session today.  The bulls need to be careful not to buy the high right now but with such a strong move today we assume there will be buyers waiting at all levels of support below which tells them to be patient for a pullback before buying more tomorrow.  Ideally the buyers want to look for opportunities below prior swings as counter-trend sellers try to catch a reversal.  Sellers need to be careful and resist the temptation to try and call a top and wait for a lower-low to hold a pullback before they can safely sell this market tomorrow.

Gold is bullish and pulling back into the spike & channel correction zone with buyers trying to re-test the highs; The bulls had control for most of the session today with a somewhat lazy spike & channel and finished the session with a strong move from the bears that will likely have the bulls thinking twice before they buy this market tomorrow.  As with all spike & channels, the bulls want to see seller-failure after this pullback but the strength of this recent move combined with the resistance trend-line overhead gives the buyers a challenge they need to work around tomorrow.  Sellers will be looking for the next pullback to hold at the trend-line for a target at 17.4 and 13.3 or they can look for buyer-failure above the trend-line for an even better entry price back down again.

Euro is bullish with a lazy channel trending higher which tells the buyers to focus on buying low tomorrow because sellers will be waiting at the highs; The bulls had control all morning but it’s easy to see that every time price made a new high it was followed by selling into deep pullbacks which tells us that both the bulls and the bears can make money in this market and the bulls will need to be careful not to buy the highs.  The bulls will be focused on buying pullbacks at previous swings for the most reliable trading tomorrow while the aggressive sellers will continue to look to 'fade' the highs as it grinds higher until they can get a new lower-low that hold a pullback and sellers take control.

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