Wednesday, October 26, 2016

Trade Plan for Thursday | SchoolOfTrade Newsletter 10/26/16



“Character cannot be developed in ease and quiet. Only through experience of trial and suffering can the soul be strengthened, ambition inspired, and success achieved.” 
Notes for Tonight’s Newsletter:
Crude Oil is bearish and trading at the lows of the daily range, E-mini S&P is bearish after a collapse off the highs, Gold is bearish with a big overshoot at the channel low, and the Euro is bearish and trying to break through some key support levels this evening.  We had a wild ride on most of these markets, and those big ranges mean big opportunities for tomorrow.


Crude Oil is bearish and trading at the lows of the daily range after collapsing off the $50 level just after today's inventory report was released.  The bears have control, but it’s obvious the sellers don’t want to sell this low or else they would have sold the last test of the moving-average, so we assume they want a higher price, most likely up at the reversal-lines and battle zone areas overhead which leave the door open for the buyers to take control if they can find some strength as price pushes back above the moving-average.  Sellers would love to see a test of the battle zone for a big move back down and the buyers want to see a successful breakout-pullback above the reversal-line at 49.32 to get the moving back to the battle zone.

E-mini S&P is bearish after the collapse off the highs, but the bulls are putting-up a good fight for control, and whoever wins will determine whether we head back to the highs or lows tomorrow.  The sellers took control on the way down off the highs, which means the buyers need to show us they can hold this pullback or the sellers will use the failure to send it back to re-test the lows.  Buyers need to see a successful breakout-pullback above the reversal-line at 35.75 for a target at the high and measured-move.  The sellers, on the other hand, will look to sell into this failure as long as they don’t need to sell into the rising support trend-line for a move back to re-test the lows.

Gold is bearish with a big overshoot at the channel lows which will give the sellers opportunities to hold the low of the channel or wait for a larger correction ahead of the next move lower tomorrow.  The bears have control, but if they look to sell the low of the channel they have to worry about the measured-move and triple-down support levels in the way, which means the more reliable opportunity will be up higher in the correction zone and battle zone overhead.  This will also give the buyers a window of opportunity on the way higher, but they need to get a successful breakout-pullback above the low of the channel first.


Euro is bearish and trying to break through some key support levels on the way down to re-testing today's low.  The bears have control, but they find themselves at the completion of a wedge and a measured-move, which tells them to either look for a 'trap high' at resistance levels overhead, or a breakout-pullback below the wedge support below.  The buyers, on the other hand, may have had control earlier today, but they lost it, and the only way to get it back is to get a successful breakout-pullback up above the next resistance level and make a run to re-test the high tomorrow.

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