Wednesday, July 20, 2016

8 Trades for Thursday | Crude Oil, Gold, E-mini & Euro Futures 07/20/16

"Learn from yesterday, live for today, hope for tomorrow." -Albert Einstein
Notes for Tonight’s Newsletter:
Another day filled with opportunity comes to an end but we're only moments away from the opening bell in Asia and tomorrow is setting-up for another big session; Crude Oil and the S&P are bullish while Gold and Euro are bearish going into Thursday's session.

Crude Oil is bullish after today's Inventory Report but the spike & channel tells the bears they have a small window of opportunity before the bulls look to re-enter this market in the correction zoneThe day started with a strong move lower for the bears but they couldn’t hold it after the inventory report was released and the bulls easily pushed back to the highs for a double-up target at $46.00.  The session finished with a spike & channel and a short-term bear wedge, both of which tell us that price is likely to pull back to the correction zone before we see the buyers re-enter with a target back to the highs.  Bears have a small window of opportunity if they can hold this next pullback but they need to get to it quickly because we expect to see buying opportunities after a test of the 45.20 area for a move back to the highs.

E-mini S&P is bullish and trading inside a range just a few ticks below the measured-move this evening.  The bulls finally got the move they wanted off the lows of the range from last night's newsletter and made new all-time highs before finishing the session in a narrow range with a bull bias.  The new all-time highs quickly remind us of what happened over the last week of trading... avoid buying high and stay patient to buy the dips with traps and failures.  The trading range and the wedge give the buyers levels of support and resistance to work with as they look to buy low and take profit at the highs.  The sellers need to be very careful right now because we assume that every pullback is going to be a buying opportunity for a move back to the highs.

Gold is bearish and trying to finish the completion of a bear wedge but the lack of follow-thru into the close tells us we need to see more information before we can make the decision as to where we go next.  The bears clearly had control for the entire session today with a measured-move, and a picture-perfect trap-high before re-testing the lows.  The big clue this evening is the weak close at the lows... it doesn’t look like the bears have much left to the downside at this point which tells the buyers to look for a breakout pullback for a move to the battle zone at 1325.7 or the bears will need to show us some strength for their own breakout pullback to make a triple measured-move and possible back to 1300.0 tomorrow.

Euro is bearish in the long-term but rotating higher in the short inside a bull channel on the way to testing the measured-move target overhead which we assume will be another place for long-term sellers to keep hunting for opportunities to sell high on the way back to test the lows tomorrow.  The session started with a strong push lower which can now be seen as a big bear 'flag' as the buyers have now formed a bull channel that clearly keeps getting sold at the highs while the buyers keep buying it up at the lows.  The bears will likely keep selling the high of the channel and will eventually get a breakout pullback below the channel lows with a target to the low of day and possibly the round number at 10,000.  The bulls will be looking for seller-failures at the lows of the channel or they need to see a successful breakout pullback above the channel highs for a move to the double-up target around 10,900 tomorrow.

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