Thursday, July 7, 2016

Friday’s Trading Strategy | Crude Oil, Gold, E-mini & Euro Futures 07/07/16

“Successful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential.” 
Notes for Tonight’s Newsletter:

Markets are once again giving us excellent opportunities ahead of tomorrow's Non-Farm-Friday session; Crude Oil and Euro are bearish while the S&P and Gold are bullish ahead of the major news at 8:30am EST tomorrow.

Crude Oil is bearish after today's inventory report sent prices back to new monthly lows but the bulls will be waiting for their chance tomorrow; The day started with the bulls in control until the Inventory Report sent prices tumbling to new monthly lows shortly after 11am EST.  The market is clearly bearish this evening with a strong move down to complete the double-down target at $45 with a pending bear channel and triangle to work with tomorrow.  The most important thing to remember tomorrow will be that the sellers have control and we cannot start thinking about buying until we see the bulls hold a pullback after a new higher-high.  We have to assume that swing-sellers will be waiting above all the resistance levels above with the goal of going back to the lows again tomorrow and possibly down to the triple measured-move around $44.  If price rises, the sellers will look for buyer-failures to sell back to the lows.  If price pushes lower the bears need to be careful not to 'sell low' and wait for proof that buyers aren’t waiting at the lows for an easy trap to send prices higher.  The bulls need to get a successful breakout-pullback, and if they can hold, they have wide open space back to the battle zone just below $47.

E-mini S&P is bullish on the way to testing a spike & channel correction zone but the bears will be watching closely to see if they fail for a re-test of the lows; Today’s session started with the bulls in control but soon followed Crude Oil lower in the wake of the inventory report at 11am EST.  We have a bear spike & channel and a pending bear channel on the chart this evening that tell the sellers to look for opportunities up at the correction zone which also lines-up with the high of the pending bear channel.  In the short-term we can see a strong move higher from the buyers which tells us to expect a reliable pullback to the moving-average for another leg higher at the beginning of tomorrow's session.  The buyers will be looking for the next pullback for an opportunity on the way up to the correction zone overhead and then they need to wait for a successful breakout-pullback above the correction zone for the next move back to the round number at 2100.  Meanwhile, the sellers will be waiting for the buyers to fail.  The strength of this move doesn’t sit well for the sellers so they need to be patient and wait for the pullback to fail and then get in on the next move back to the lows if possible tomorrow.

Gold is bullish but struggling to keep control and the sellers are waiting patiently to re-test the lows if they fail; The sellers had control for the entire session today but fell just short of the double-down target at 1350.7 which will be a target if the buyers can’t hold this pullback tomorrow.  The strength of the move lower today tells us that swing-sellers have been scaling-into their positions as this price pulls-back into the correction zone at 62.5.  The recent move from the bulls was quite strong, and as-expected they bought the first pullback with a target to new highs but they struggled to keep it going which is now giving the sellers the window they need to take price back to the lows if the buyers can’t finish the job with a new higher-high that hold above 1364.4.  With Non-Farm payrolls due out tomorrow morning we may see this market trade sideways which gives the bulls another shot below 59.1 and the sellers will be waiting to see if they fail for a target down at 52.0 and 50.7.

Euro is bearish and trading at the lows of the channel this evening which means sellers need to stay patient for a higher price to sell; The bears had control for the entire session today but failed to complete the measured-move in a low-volume session ahead of tomorrow's Non-Farm Payroll Report.  Trading at the low of the bear channel makes it hard for sellers to find a reliable opportunity until we get a move back to resistance levels overhead which also gives the bulls a small window of opportunity to find a scalp back to the highs of the channel.  The bulls need to see a move back above the moving-average and then hold the pullback on the way back to channel highs where we assume the sellers will be waiting to sell it back down.  If price can push through the battle zone above 11159 then the buyers can look again for a breakout-pullback for a test of the highs, but they need to watch carefully because the sellers will be waiting to finish off the measured-move on the way back to the lows.

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