Tuesday, August 2, 2016

Wednesday Trade Plan | Crude Oil, Gold, E-mini & Euro Futures 08/02/16

"Watch your thoughts; they become words. Watch your words; they become actions.  Watch your actions; they become habits.  Watch your habits; they become your character.  Watch your character; it becomes your destiny.  -Frank Outlaw
Notes for Tonight’s Newsletter:
We have great trends and big ranges to work with tomorrow; Crude Oil is bearish while the S&P, Gold and Euro are all bullish heading into Wednesday's session.

Crude Oil is bearish and bouncing off the measured-move target this evening and we assume that sellers will be looking for opportunities to send price back to the lows tomorrow.  Just as expected, buyers got a short-term opportunity to start the session this morning before the sellers took back control and ran price down to new monthly lows.  As price bounces off the lows we know that this is a bear-market and we will focus on selling back to the lows until the buyers can prove they have control by holding a pullback.  Just like earlier today, the buyers can hold a pullback and make a run back to the 'battle zone' up at $40 but we assume that is where the majority of long-term sellers will be waiting around the high of the pending bear channel tomorrow.  We have news at 10:30am EST tomorrow which is the only real variable that we need to watch for.

E-mini S&P is bullish after the buyers successfully held their pullback but the overall trend is bearish and they need to hold through the 'battle zone' if they want any chance to get back to the highs.  The buyers have short-term control with a bullish wedge this evening which tells them to look for pullbacks to support with a target up at the battle zone overhead.  Sellers need to be patient right now because the buyers have control, waiting for an opportunity to get a new lower-low and hold a pullback of their own with a target back at the low tomorrow.  Don’t forget about the Crude Oil Inventory Report tomorrow @ 10:30am EST because that may cause some un-expected volatility as well.

Gold is bullish and trying to finish the move up to the wedge and measured-move targets overhead.  The most important clue this evening is that the buyers failed to reach their targets and with the most recent pullback failing to re-test the highs we can assume that buyers are no longer interested in buying this high and they will be waiting for an opportunity to buy at a lower price tomorrow.  Buyers will be looking for a trap below 68.1 or a breakout-pullback above the falling resistance trend-line with target up at the high and then up to the completion of the wedge.  Sellers have a short-term target back at the 'battle zone' at 64.0 but we can assume that sellers will be anxious to buy more if they can get this deep pullback.  It won’t be until we can get (and stay) below the 61.5 before the sellers can really get some open space to sell back to the lows.

Euro is bullish and trying to complete a wedge target this evening but it appears the majority of the buyers are taking profit at the measured-move and waiting for a pullback so they can buy more on the way higher tomorrow.  There are two potential wedges on the chart giving us two different targets overhead but the measured-move was completed and tells the buyers to look for seller-failure after a pullback or a successful breakout-pullback above the measured-move tomorrow.  Sellers need to be careful right now because there isnt much open space to the downside with a rising support trend-line, a reversal line and the battle zone all waiting for buyers to get in at a lower price with a target back to the highs.  Sellers won’t have much room to sell until we can get (and stay) below the swing at (C) down around 12100.

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