Tuesday, January 24, 2017

3 ‘Overshoots’ to watch Wednesday | SchoolOfTrade Newsletter 01/24/17



“The major reason for setting a goal is for what it makes of you to accomplish it. What it makes of you will always be the far greater value than what you get.”

Crude Oil is bearish after this afternoon’s API Report, trading at the low of a bear channel and a measured-move this evening, so our plan is to wait to sell high tomorrow.

E-Mini S&P is bullish after a big run higher today, but price moved so far, so fast, that we assume buyers will be weary of buying this high, and will stay patient for a deeper correction tomorrow. 

Gold is bearish and trading at the measured-move and the low of a channel this evening, so we’re waiting to sell the highs tomorrow.

Euro is bearish and trading at the measured-move and the low of a bear channel, which tells us to look for selling-opportunities up at the high of the channel and ‘battle zone’ tomorrow. 

FDAX is bullish and trading at the high of a bull channel this evening which tells us to look for buying opportunities at support levels waiting below. 


Crude Oil
Crude Oil is bearish after this afternoon’s API Report, trading at the low of a bear channel and a measured-move this evening.  The bears have control, but we don’t want to sell into all of this support on the chart, so the plan is to stay patient and look for selling-opportunities up around the high of the channel and the ‘battle zone’ tomorrow.  One thing to keep in mind is tomorrow’s Inventory Report, which is due out at 10:30am EST and will be a major event to avoid.

E-Mini S&P
E-Mini S&P is bullish after a big run higher today, but price moved so far, so fast, that we assume buyers will be weary of buying this high, and will stay patient for a deeper correction tomorrow.  Big moves like the one we saw today tell me to look for a trading-range to develop tomorrow, and bull-traps as the price tries to re-test the high.  One thing to keep in mind tomorrow will be to ‘buy low’, which is much easier said than done.  The plan will be to look for traps and failures at support levels, looking for ways to ‘buy low’ while catching traders on the wrong side of the market.

Gold
Gold is bearish and trading at the measured-move and the low of a channel this evening.  Gold finished the session right on its low, but we don’t want to sell into this support area on the chart, so the plan is to wait for a retracement back up to the ‘battle zone’ where we will find more reliable selling-opportunities back down to the lows again.  If price does keep tumbling lower, the key will be getting underneath the triple-down and hold a successful breakout-pullback below the low of the channel for a possible triple measured-move.

Euro
Euro is bearish and trading at the measured-move and the low of a bear channel, which tells us to look for selling-opportunities up at the high of the channel and ‘battle zone’ tomorrow.  The bears have control, but we don’t want to sell this low, we will find more reliable selling-opportunities up at resistance levels, so the key is patience at this point.  If price does keep tumbling lower, we have Monday’s low as a target.

FDAX

FDAX is bullish and trading at the “Double-Up” and high of a bull channel this evening which tells us to look for buying opportunities at support levels waiting below.  The bulls finished the session with a strong move higher which ‘over shot’ the high of the channel, and that usually results in an ‘overshoot’ back at the lows, however, this market is so strong that the buyers may not allow the price to pull back far enough, so keep an eye out for a trading-range developing and focus on buying below the lows using traps and failures tomorrow if the chart start going sideways.  The goal is to buy the low of the channel, which requires a decent move lower, one that short-term sellers will be able to trade, so it will be important for the buyers to ‘wait for the turn’ before they start buying the pullback tomorrow.

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