Wednesday, July 6, 2016

3 Ways to Trade Strength | Crude Oil, Gold, E-mini & Euro Futures 07/06/16


"I don't care how much power, brilliance or energy you have, if you don't harness it and focus it on a specific target, and hold it there you're never going to accomplish as much as your ability warrants." –Zig Ziglar 

Notes for Tonight’s Newsletter:
Markets continue to move well through the first week of July with plenty of reliable trading opportunities today and many more setting up for tomorrow's session; Crude Oil, S&P and Euro are bullish while Gold appears to be failing and wants to move back to the lows on Thursday.


Crude Oil is bullish and trading with a spike & channel this evening; The session started with the bears in control this morning but shortly after 11am EST the bulls took clear control after a spike higher sent price all the way to the 'double-up' target at 47.58 and began trading with a spike & channel.  We can see the bulls took profit at the first test of the target and then got a beautiful 'trap low' to finish the move back to the high of the channel.  Buyers will certainly be interested but this last push higher is based on the 4:30pm API report which means it's not reliable to buy this high, and much more reliable to wait for the rotation back to the low of the channel, or even better, a pullback to the correction zone just below $47.  Sellers need to be patient right now because the strength of this move will likely make it difficult to find reliable selling opportunities as buyers will be scaling-into this move as it pulls back to support levels below.

E-mini S&P is bullish and trading inside a wedge this evening; The day started with a trading range this morning but shortly after 11am EST the bulls took control with a spike & channel that appears to be narrowing into a bullish wedge.  The wedge tells the buyers to look for 'traps' below the prior swings and provides a target up at 2095 while the spike & channel provides additional opportunities at the lows of the channel as well as the correction zone at 2083.  sellers need to be patient right now because the more this market pulls-back the more buyers will be interested, but once we can get and hold a pullback below the high of the trading range we should see a reliable move back to the low of the range that started today's session.

Gold is bearish after a bull flag appears to have failed this evening; The day started with a strong spike higher which gave the bulls three opportunities to buy the dips as price pulled-back off the highs in the form of a bear channel (also known as a bull flag).  Flags are usually very narrow and buyers will be looking for opportunities to buy the first three 'dips' which means this is the last chance for the buyers to get a new higher-high and hold a pullback going back up to the highs or this market will collapse and re-test the 1356.6 low and possibly the double-down target at 1352.5.  The bulls need to get and hold a pullback above the 1371.2 if they have any chance to re-test the 1377.5 high and sellers will be waiting to see them fail for a potential collapse back to where this move began earlier today.


Euro is bullish and trading with a spike & channel this evening; The bears started the session this morning by finishing-off unfinished business from yesterday and after they got their target back at the lows they took profit and gave the buyers the window of opportunity they needed to send price up to new highs to finish the session with a strong bullish spike & channel.  The strength of this recent move is a big clue that tells us the next pullback to the moving-average will likely be a reliable buying opportunity with the proper entry trigger with additional opportunities at the previous swing-low and the correction zone if price wants to pull back further.  Sellers have a difficult job right now because the strength of this move gives buyers the confidence to buy all the dips and the low of the channel is also waiting below the correction zone which means the only reliable option will be to get a quick move below the moving average and sell the first retracement down to the correction zone or risk trying to sell new highs with a double-overshoot of the major channel.

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