Thursday, August 25, 2016

Friday’s Trading Plan | Crude Oil, Gold, E-mini & Euro Futures 08/25/16

“In today’s world, the greatest source of wealth is between your ears.”

Notes for Tonight’s Newsletter:
I’m back from my spa-getaway in East LA yesterday (kidding of course) and we have markets setting-up with some great opportunities for a Summer-Friday.  Janet Yellen hits the stage tomorrow morning from the Jackson Hole Symposium which means our plan will be to find those opportunities early and finish up a fantastic fourth week of August.  Crude Oil, Gold and Euro are bullish while the S&P is range-bound heading into Friday.

Crude Oil is bullish and trying to finish rotation up to the highs of a bull channel this evening; The bulls have control, but the big wicks we see at the highs tell us this may be turning into a wedge, and if that is the case then we will look for the next buying opportunity back at the lows.  Buyers will be looking for a breakout-pullback above the potential wedge high or buy with seller-failure back at the wedge lows with a target up at the measured-move at 47.67.  Sellers don’t have any proof, in fact, the most recent move was very strong from the buyers which tells us that any pullback will likely be seen as a buying opportunity for the bulls.  Sellers need to get a strong break-down below the 46.81 and then manage to hold a pullback if they want to have any confidence in selling tomorrow.

E-mini S&P is range-bound and trying to finish the rotation back to the high of the range this evening; Buyers have control at this point and (assuming we don’t finish the move back to the highs) will be looking to buy the next pullback.  If the bulls can’t get in before we reach the high then they need to get a STRONG breakout-pullback above the highs or look for the next opportunity back at the lows of the range.  Sellers need to wait for the completion of the move back to the highs and then look for buyers to fail at the highs without selling into the rising support trend-line we have coming off the lows.

Gold is bullish and trying to break out of a triangle on its way back to the highs of today's range; The buyers have control with a very strong move off the lows which has now turned sideways into a triangle.  Regarding the triangle, buyers will be looking for a breakout-pullback above the high or an even more desirable 'trap' below the lows but the falling resistance trend-line will force us to wait and see how it sets-up before looking for a move up to the measured-move and the highs of the range.  Sellers on the other hand, will need to see a strong breakout-pullback below 23.8 and then get into the move before we get back to the lows or they will need to wait to sell the high of the range using buyer-failure later in the session tomorrow. 

Euro is bullish and trying to re-test the highs, but the sellers don’t appear to be making that very easy this evening; The bulls have control, but with a strong move off the highs and a resistance trend-line overhead this is likely going to be an ugly battle for both sides.  Buyers would normally be looking for seller-failure at the lows of the bull trading-range but the strength off the highs tells them to wait for the second attempt, which is setting-up now.  In addition, the trend-line overhead doesn’t give the buyers much room so they need to get a breakout-pullback above the trend line without buying into the high of the range or wait for a strong breakout-pullback above the highs of the range for a measured-move target.  Sellers need to take control of this market by holding this pullback and finishing the move strong, then we can look for the move back to the lows.

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