“Trading is a game of probabilities and pattern-recognition that can be won by anyone who is willing to invest the time to learn the business, develop the skills, and maintain the trader's mindset.” – Joseph James
Notes for Tonight’s Newsletter:
These markets are looking great ahead of Wednesday's session; Crude Oil is trading with a wedge, S&P inside a bearish range, Gold just reached its measured-move, and the Euro finally tested the lows of its range and will be looking for a move back to the highs.
Crude Oil is bearish and trading at the highs of a wedge this evening as it tries to finish off the move back to Monday's low at 44.72. With a bearish wedge we know that sellers are going to be selling off the highs and will need to avoid selling into the low while the buyers will be aggressive trying to call bottoms buying off the lows looking for moves back to the highs. The most reliable way to sell this market tomorrow will be waiting for opportunities up at resistance levels and look for moves back to the lows with an ultimate target down at 44.26 to finish off the wedge.
E-mini S&P is bearish and trading at the lows of a range this evening which means the bulls are buying off the lows with a target back to the range-highs and sellers are waiting patiently to get their shot at higher prices for a move back to the lows. Buyers are likely already in this move coming off the lows and the window of opportunity is closing quickly for bulls to get in at what appears to be a short-term bottom. Sellers need to stay patient and wait for either a move back to resistance or a strong breakout below the range to sell a pullback with a target down at the 2107 low from Monday.
Gold is bearish and recently completed its measured-move at the lows of a bear channel which means we are likely going to see buyers enter the market looking for a move back to channel highs before sellers re-enter the market at a higher price tomorrow. Once we achieve the measured-move we then expect to see either a 2-legged-correction up off the lows, a strong break down to a triple measured-move, or a sideways range develop with a bearish bias tomorrow. Sellers will be looking for opportunities back at resistance levels overhead while buyers will be looking for seller-failure at the moving-average for an aggressive opportunity to try and call a short-term bottom.
Euro is trading at the lows of the range this evening which means buyers will be looking for seller-failures to buy the lows going back to the highs and sellers will be looking for a continuation below the range down to the expansion target at 11662. As with any range, our goal tomorrow will be to use range rotation to buy low, sell high, focus on failures and use the pendulum swing to identify targets as this balanced market tries to find a new direction tomorrow.
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