Monday, July 18, 2016

6 Trades for Tuesday | Crude Oil, Gold, E-mini & Euro Futures 07/18/16

“If you are going to achieve excellence in big things, you develop the habit in little matters. Excellence is not an exception; it is a prevailing attitude.”
Notes for Tonight’s Newsletter:
If today's volatile markets are any clue for the rest of the week we should have no problem finding plenty of trading opportunities across our favorite futures markets; Crude Oil is bearish, S&P and Euro are bullish and Gold is trading sideways inside a range as we head into Tuesday.

Crude Oil is bearish long-term, bullish short-term, and that can easily change depending on this next pullback; We started the session this morning with contract rollover to the 09-16 contract and a strong bearish trend which barely missed the triple-down target at 45.43 before the buyers got their opportunity to hold a pullback and take control of the market moving higher.  We have to give the bears the edge right simply because of the strong move lower to start the day but we can’t count out the buyers either if they get a good signal to buy this next pullback.  I think the bull channel is going to be the most important variable in the short-term.  Sellers want to see a breakout pullback below the channel lows for a sell down to re-test the low of day or they can also look for buyer-failure at the high of the channel and measured-move resistance if they want to wait for a better selling price.  Buyers will be looking for seller-failure at the low of the channel or at the 47.74 swing-low and they will want to continue using the low of the channel to make sure they don’t get caught buying high tomorrow with a target back to the high around 46.84.

E-mini S&P is bullish and trading inside a range this evening with a target to go back to re-test today's high; We started the session with a big gap higher from last Friday's close which then pulled back nicely to allow buyers to get into the move before 'trapping low' and finishing the session with a somewhat lazy spike & channel this evening.  We have to give the bulls the edge this evening because the gap gives the trading range a bullish bias and the spike & channel tells us to expect rotation back to the channel high.  The goal for the buyers will be to complete the rotation back to the range highs and then try to get a breakout pullback up to complete the measured-move.  The goal for the sellers will be to get buyer-failure at the correction zone or at the range high for a move back to the low of the range tomorrow.

Gold is trading sideways and trying to complete rotation back to the low of the range this evening; Double-tops and double-bottoms make it very easy to define this trading range which tells us to focus on rotation, failures and the 'pendulum swing' until we see a strong enough breakout that can reach one of the expansion levels either above or below the original range.  The sellers will be looking to finish rotation back to the low of the range and then a successful breakout pullback down to the expansion target at 1314.6.  Buyers will be looking for the sellers to fail on their rotation and send prices back to the high at 35.0 then hold a breakout pullback up to a measured-move target at 1339.2 and then the expansion target at 1345.2.

Euro is bullish and trying to re-test the high of day this evening; The session began with a small gap higher over the weekend which then pulled back to allow the buyers to buy at a cheaper price before making a strong push up to new highs.  That strong push higher gave the bulls a channel which has broken and is now trying to re-test the highs.  In addition to the channel we can also see a possible bullish triangle which may give the buyers an even better price to buy if they can get a 'trap low' below a prior swing.  The bulls will be looking for a breakout-pullback above the triangle high or a seller-failure below the triangle low with a target up at the high of day and the measured-move.  Sellers will need to stay patient until they can get a breakout pullback below the triangle low and then watch out for the hidden low of the bull channel on the way back to re-test the low of day and possibly Friday’s low to finish the session tomorrow.

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