Thursday, October 27, 2016

End of Month Strategy | SchoolOfTrade Newsletter 10/27/16



“Knowledge has to be improved, challenged, and increased constantly, or it vanishes.” 
Notes for Tonight’s Newsletter:
Crude Oil is bullish and trading at the low of a channel, the E-mini S&P is bearish and trading at the low of a wedge, Gold is range-bound and trading at the low of a channel, and the Euro is bearish and trying to complete a measured-move after a collapse off the highs today.

We're ready to finish up the last full week of trading for October, we've had a great week in our trade room and on this newsletter, and we have a reliable strategy for tomorrow.


Crude Oil is bullish and trading at the low of a channel, just above the battle-zone this evening as the bulls attempt to reload and re-test the highs while the bears try to hold this pullback and make a run back to the lows.  The bulls have control, and they want to see the sellers fail and look for a breakout-pullback back above the moving-average to buy back to re-test the highs.  Sellers, on the other hand, need to hold this pullback for a move down to the battle zone and then hold another below the 49.33 for the opportunity to make a run back to the lows.  The bulls will be hunting for the $50 level, the wedge target, and don’t forget about last week's closing price at $51 if it gets crazy tomorrow.  Sellers will be hunting for the low of day and the prior month high.

E-mini S&P is bearish and trading at the low of a wedge this evening which tells us that sellers will likely be taking profit and looking to reload at resistance levels waiting overhead.  Sellers have control, they got their double-down, but they missed the measured-move which will likely be an easy target for them tomorrow, but they won't want to sell into the lows which will give the buyers a chance to get above the reversal-line at 30.25 and try to grab a move back up to the battle zone tomorrow.  Sellers want to see a failure at the resistance levels overhead for a move back down, while the buyers would love a breakout-pullback above the reversal-line tomorrow.

Gold is range-bound and trading at the low of a channel, just above last week's closing price, with a slight bull bias this evening.  The bulls had control earlier in the session, corrected off the highs, but they've struggled to keep momentum moving higher in what appears to be the bears trying to sell into each attempt they make to re-test the highs.  Both sides need to see some strength to get away from the prior week closing price at 67.3 and with tomorrow being a Friday we may indeed see this market turn sideways.  The bulls have the edge, and will look for a breakout-pullback above the range-high at 70.8 for a target back to the highs.  The bears, on the other hand, have to work through the low of the channel and they don’t have much space below until they run into the measured-move which means the timing for the sellers is critical tomorrow unless price just collapses and runs below the measured-move.


Euro is bearish and trying to complete a measured-move after a strong move off the highs, but the bears didn’t show much interest at moving-average, and with the double-down already achieved we can assume they want to sell at a higher price which will also give the buyers a great opportunity to grab control and take this back to the highs tomorrow.  The bears have control and will be looking for traps and failures above the most recent swing-high and at the reversal-line or they need to get through the double-down without running into the prior week closing price, which we assume will be a magnet to finish the week tomorrow.  The buyers, on the other hand, need to take control with a strong push above the reversal-line overhead and hold a pullback for what may be a very easy move back to the highs tomorrow.

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