Wednesday, November 16, 2016

Trading Range Strategy | SchoolOfTrade Newsletter 11/16/16



We have a few trading-ranges, a triangle, a channel overshoot, and Janet Yellen on Capitol Hill tomorrow which means we have a very specific plan of attack for Thursday’s session.

Crude Oil is range-bound and trying to finish rotation back to the low of the range, E-Mini S&P is bearish and trading inside a narrow range, Gold is trading at the low of a triangle, Euro is bearish and rotating off the lows of a trading-range, and the FDAX is bearish and trading at the high of a channel.


Crude Oil is range-bound and trying to finish rotation back to the low of the range, where we assume buyers will be waiting to buy the lows.  Our plan for trading inside a range is to buy the low with seller-failure, sell the high with buyer-failure, and avoid the middle because that is where price-action will be unreliable. 

E-Mini S&P is bearish and trading inside a narrow range this evening which means our plan for tomorrow is to sell the highs using buyer-failures, and buy the lows using seller-failures.

Gold is trading at the low of a triangle this evening which tells us to trade this just like a range; buy the low using seller-failure, sell the high using buyer-failure, and avoid the middle like the plague tomorrow until we can get a strong breakout that can hold and give us a new trend to work with.

Euro is bearish and rotating off the lows of a trading-range this evening, which tells the sellers to look for buyer-failures up at the highs of the range and tells buyers to look for seller-failures at the low of the range tomorrow.


FDAX is bearish and trading at the high of a channel this evening and the recent channel overshoot, combined with the measured-move, tells the sellers to be looking for a correction higher tomorrow before looking for new selling-opportunities.  This overshoot of the channel was quite significant, and combined with the rising support trend-line, the bulls have a great opportunity to take control of this market, but they need to hold the next pullback before they can have any confidence in buying tomorrow.

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