Wednesday, September 21, 2016

Trade Plan for Thursday | SchoolOfTrade Newsletter 09/21/16


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Notes for Tonight’s Newsletter:
Markets are reeling after today's FOMC Announcement and we have some wide ranges to work with tomorrow which usually means big opportunities as well; Crude Oil is bullish and trading at the highs of two channels, E-mini S&P is bullish and trading at the highs of a channel, Gold is bullish and holding the mid-line of a bull-channel (which is a big clue), and the Euro is trading at the highs of a range going into Thursday's session.

Crude Oil is bullish and trading at the highs of two channels this evening which means buyers are waiting for a decent pullback off the highs and sellers will begin trying to find a top in what has been a strong bull market after the FOMC Announcement was made earlier today.  The buyers have clear control of this market right now, but trading at the highs is not the ideal place to look for buying opportunities, so bulls will be looking for a pullback to the lows of the channel, ideally all the way back in the correction zone of the spike & channel for a move back to the highs.  Sellers on the other hand, need to either gamble with trying to sell the overshoot of the channel or what for a more reliable opportunity after they can make a new lower-low and hold a pullback tomorrow on the way back down to the correction zone around 45.00.

E-mini S&P is bullish and trading at the highs of the channel after a strong push from the buyers which means buyers will be trying to use that strength to either look for a breakout-pullback above the channel-high or wait for sellers to try and reverse the move and look for failures.  Sellers on the other hand, have no proof of control so they need to avoid trying to call a top and wait for price to get back below support levels and hold a pullback or they will have to gamble with selling an overshoot of the channel highs.  The strength of this move higher tells us that we most likely won’t see a correction all the way back to the channel lows (although anything's possible after FOMC) so the most reliable thing to do is either wait for a pullback to the support levels below us or rely on a strong break higher for proof of the move to the double-up target overhead.

Gold is bullish and holding the mid-line of a bull-channel which is often a big clue that a deep pullback is about to occur and a possible bullish spike & channel gives the buyers a good idea of where the best opportunities will come if we do indeed get a nice correction off the highs.  The bulls have control of this market and they will be looking for opportunities at support levels in the correction zone, the low of the channel and possibly the battle zone if this market really falls apart after the FOMC 'sugar rush' wears off tomorrow.  Seller on the other hand, need to stay patient to see if this pullback holds, and if it fails they can look for a move down to the battle zone at 26 and possibly a move back to re-test today's low.


Euro is trading at the highs of the range this evening which means our goal will be to buy the lows, sell the highs, avoid the middle and focus on failures until we see a new trend develop tomorrow.  The buyers will be looking for a successful breakout to finish the measured-move and sellers will be looking for a failure to sell back down to the lows of the range.  The most important clue on this chart is the range, which means the channel and measured-move will act as support and resistance as this market rotates back and forth from high back to the low and vice versa.  Sellers would love to see the buyers get their measured-move and then sell back down to the lows while the buyers want to see a VERY strong push higher to negate the range and go hunting for the range expansion up at 12585 tomorrow.

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