Monday, August 1, 2016

6 Trades for Tuesday | Crude Oil, Gold, E-mini & Euro Futures 08/01/16

“Life does not get better by chance. It gets better by change.”  – Joseph James
Notes for Tonight’s Newsletter:
We have some strong trends and some choppy ranges heading into Tuesday's session; Crude Oil, S&P and Euro are bearish while the Gold is bullish as we crack-open the first week of the month of August.

Crude Oil is bearish and trading sideways after the sellers reached their double-down target today; The trend is clearly bearish so we will be looking for selling opportunities until the buyers can prove otherwise tomorrow but the most important clue this evening is that we've reached the target for the sellers, which tells us to avoid 'selling low' and to wait for traps and failures at resistance levels overhead for the most reliable selling opportunities tomorrow.  The buyers need to be careful here, waiting for a higher-high that can hold a pullback before trying to call a reversal tomorrow. 

E-mini S&P is bearish and trading inside a wedge as it struggles to complete the double-down target this evening; The first thing that stands out from today's session is that the bears weren’t able to be any targets reached, with both the measured-move and the double-down targets still left outstanding.  The second big clue we see is that the best moves happened after a 'trap high' which is telling us that the sellers are interested, just not interested in selling the lows.  With those two important clues we know to keep looking for selling opportunities with traps and failures above the prior highs and use the double-down and measured-move targets waiting below.  On the other hand, buyers need to be careful not to get too aggressive with new higher-highs because we already know that sellers are using them to get into larger moves back to the lows.

Gold is bullish but struggling to re-test last Friday's high in what may become a range-bound session tomorrow; The first thing that stands out on this chart is the 'trap low' that occurred mid-way through the US session which was clearly the spark that sent price up to new highs.  The second thing that stands out is the lack of follow-through at the highs with big wicks and no closes above the 61.1 swing.  Considering these two important clues it is easy for us to see that buyers are interested at the lows but not interested at the highs which means all we need is to see buyers fail off the highs for price to move back down to the lows again tomorrow.  Buyers need to be careful with this pullback, waiting for a 'trap low' below the spike & channel.  Sellers just need to wait for the buyers to fail on the next pullback and then look for selling back down to the lows.

Euro is bearish and sloppy as buyers appear to have rejected higher prices after last week's big run higher; The first thing that stands out on this chart is 'YUCK, this is sloppy'.  With such little price-action on today's chart we look back a few days and we can easily see a strong push higher has apparently run out of momentum and now buyers are waiting for a lower price to buy more this week.  The short-term bear channel tells us there is a target back at the lows and we still have a measured-move and double-down target waiting as well.  Looking back a few days we can also see an area of interest that we assume will act as a price-magnet for the bears and a long-term buying opportunity for the bulls tomorrow.

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