Thursday, November 17, 2016

5 Trades for Friday | SchoolOfTrade Newsletter 11/17/16



Crude Oil is bearish and trading at the lows of a channel, E-Mini S&P is bullish and trading at the measured-move, Gold is bearish after finally breaking free of the trading-range, Euro is bearish and trading through the end of a wedge, and the FDAX is bullish and trading at the high of a channel this evening.


Crude Oil is bearish and trading at the lows of a channel after completing its measured-move and double-down this afternoon.  The bears are in control, but we’re trading at the lows, which tells the sellers to be looking for moves back to previous resistance levels for the most reliable selling-opportunities tomorrow.  Buyers on the other hand, need to stay patient because anything that moves higher will likely be seen as a selling-opportunity for the bears again.

E-Mini S&P is bullish and trading at the measured-move and new all-time highs this evening which tells the buyers to follow the trend higher, but avoid buying into the high until we see proof that there is interest in reaching the triple measured-move.  The most reliable buying opportunities tomorrow will come at previous levels of support, which will allow the bulls to ‘buy low’ and take advantage of the counter-trend sellers getting caught on the wrong side of the market.  Sellers need to be careful tomorrow, any pullback will be seen as a buying opportunity, so they need to stay patient for a strong push lower that can hold a pullback before they consider trying to sell into this strong bull market.

Gold is bearish after finally breaking free of the trading-range we’ve seen over the last 2 weeks, and this strong move lower tells us that sellers will be hunting for a re-test of the low and possibly a large measured-move, but the rising support trend-line may cause problems for the bears in the short-term.  Anytime we see a strong move lower, we know there is a high probability that the market will re-test the low, and if they can push through the low, then a measured-move is likely.  In this case, the higher-low on the chart tells sellers to avoid selling into this rising support trend-line and to expect price to correct higher in order to find enough room for the sellers to sell without ‘selling low’ into the support area.  With that said, the buyers may have a shot at reversing this move, and they can take control if they can hold the next pullback.

Euro is bearish and trading through the end of a wedge this evening as it tries to complete a triple measured-move.  With such a strong move lower today, it’s easy to anticipate that any move higher will be seen as a selling-opportunity for the bears, and we’ll be watching the resistance levels overhead to allow the bears to follow the trend without ‘selling low.’  Buyers need to stay patient for a strong move higher, which is needed to give the sellers a reason to take their profit rather than holding for another leg lower, as well as getting more buyers on-board for a move back inside yesterday’s range.


FDAX is bullish and trading at the high of a channel while trying to finish a triple measured-move and possibly a re-test of yesterday’s high.  The bulls look very strong coming off the lows from earlier today, which tells us that any pullback off the high will be seen as a buying opportunity for the bulls.  We’ve identified plenty of support levels below, and will be waiting for the pullback.  If price keeps pushing higher, we will look to use the top of the channel as support as long as we don’t buy into the measured-move.  One thing to remember, when the market turns aggressive like this, there will be a time when the buyers take their profit and counter-trend sellers will try a reversal… that is when patient bulls can find reliable buying opportunities when the bears fail.

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