Monday, October 31, 2016

Tuesday's Trading Plan | SchoolOfTrade Newsletter 10/31/16



“Twenty years from now you will be more disappointed by the things that you didn’t do than by the ones you did do. So, throw off the bowlines. Sail away from the safe harbor. Catch the trade winds in your sails. Explore. Dream. Discover.”
Notes for Tonight’s Newsletter:
Crude Oil is bearish and trading at the low of a channel and a triple measured-move after a strong bear run today, E-mini S&P is range-bound and trading in the middle of a triangle, Gold is range-bound with a bear-bias and waiting to see if the buyers can hold their pullback, while the Euro is bullish with a spike & channel, trying to re-test today's high.


Crude Oil is bearish and trading at the low of a channel and a triple measured-move this evening.  The sellers have control, but the bears won’t want to sell this low after today's selloff which tells them to look for opportunities up at resistance levels overhead, and often times big moves like these will result in a range the following day so the bears will be looking to sell the highs of that range.  Buyers on the other hand, need to wait for some proof before they consider buying this market tomorrow, which means they need to get back above the moving-average and manage to hold a pullback without letting the sellers take it back down to the lows again.

E-mini S&P is range-bound and trading in the middle of a triangle this evening.  Triangles are basically the same as ranges, we want to buy low, sell high, avoid the middle and focus on failures until we get a strong breakout higher or lower than can hold a pullback and create a new trend.  The buyers will be waiting for either seller-failures at the lows or a strong breakout-pullback above the 2127.75 swing level.  Sellers, on the other hand, will be looking for buyer-failures at the highs or a strong breakout-pullback below the measured-move at 2117.25 tomorrow.  The key to these types of markets is to wait for strength before you try to trade the breakouts, and keep focused on sending price back to the middle.

Gold is range-bound with a bear-bias this evening, but the buyers are trying to make a run back to the highs after the sellers clearly took their profit and got out of the way before the close today.  Sellers will be looking for buyers to fail on the next pullback for an opportunity to 'sell high' with a target back at the low.  Buyers, on the other hand, have a great opportunity after such a strong push off the lows, but they need to hold this next pullback and then look for continuations from there.  We're in the middle of the daily range, so this area in the middle will be sloppy so it's best for the bulls to get the proof they need before they try buying this pullback.


Euro is bullish with a spike & channel, trying to re-test today's high in what may end up as one large trading range on the session if they can’t keep price moving through the highs.  The bulls have control at the high of the bull channel so buyers will be looking for opportunities at the low of the channel, and more importantly, with traps below prior swings, and a target at the measured-move and today's high.  Sellers, on the other hand, dont have control, so their best option right now is to wait for the buyers to stall-out at the highs and then look for rotation back down to the low of the range tomorrow and they have an unfilled-gap waiting for them as a target on the way back down.

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