“Success consists of going from failure to failure without loss of enthusiasm.”–Winston Churchill
Notes for Tonight’s Newsletter:
Today was 'Reaction Monday' following last Friday's Non-Farm Payroll Report, and we have some excellent trading opportunities setting-up for tomorrow; Crude Oil and gold are bearish, while the S&P and Euro are bullish going into Tuesday's trading session.
Crude Oil is bearish after completing the measured-move target this evening; Today’s market was back-and-forth from the beginning, reacting to last Friday's Non-Farm Payroll report with the bears taking control and finishing the session at the low of day. This market is clearly bearish this evening, however, the bears reached their measured-move target at what may possibly be a large trading range for the day. Although there is room for further downside to the low of the bear channel, the most reliable trade for the sellers will be after a correction back to resistance overhead to help them avoid 'selling low'. Buyers need to stay patient and look for seller-failure at the low of the range, possibly using the high of the channel as support for their first pullback as they take control back to the high of the range.
E-mini S&P is bullish and trading at the lows of a bull spike & channel this evening; The S&P made new all-times once again today as traders try to anticipate the likelihood of another rate-hike in 2016 after last Friday's somewhat-impressive jobs report. The bulls had control for the entire session today, starting with a big spike & channel which is now rotating back to the lows and giving the bulls another chance to re-load on the way back to the highs. The measured-move, combined with fresh all-time highs resulted in a rather strong profit-taking selloff to end the session which will likely result in another attempt from the bears, but we assume that buyers will be waiting to buy all the dips tomorrow with the goal of going back to the highs. Sellers have the opportunity to sell the next test of the moving-average or they can wait for a breakout-pullback below the 'battle zone' but they need to be careful because we assume that seller-failure at resistance will be bought aggressively with a target back to the highs.
Gold is bearish and trying to finish a re-test of the double-down target this evening; The bulls may have started the session this morning but that didn’t last very long before the bears quickly and aggressively took control for the remainder of the session with little interest from the buyers to finish the day. The bear wedge tells the sellers to keep looking for opportunities at resistance levels using buyer-failures and provides them with a short-term target at 51.8 and a long-term target at 37.5. One of the most important things to notice is how much support is lingering at the lows this evening; the double-down, range-low and measured-move are all waiting as support which will make it difficult for sellers to get into trades at the lows. Sellers will be looking for traps at the resistance levels overhead or a strong push through the lows in order to give them confidence to sell retracements off new lows. Buyers need to be patient this evening; they need to look for a failure at the lows or a successful breakout-pullback above the 1360.8 before they will have any confidence in the opposite direction.
Euro is bullish and rotating off the low of a bull channel with a target back to the high this evening; The bulls took control shortly after the opening-bell in London this morning and got a beautiful trap-low on the way up to the high of day, high of channel and measured-move targets waiting overhead. One notable aspect on this chart is the strength of the bearish pullback going into lunch which was quickly bought and complete lack of sellers waiting to sell the moving-average. The bulls will be looking for opportunities to buy this pullback to the moving-average, or even better, buy another trap-low below the prior swing with a target back to the high. The sellers need to see a strong break-down and then must hold a pullback below the channel low if they have any chance to take control with a target back at today's low.
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