Thursday, February 16, 2017

How to Predict a Price Reversal | SchoolOfTrade Newsletter 02/16/17

“Everything You’ve Ever Wanted is on The Other Side of Fear.”

Crude Oil is bullish after a wild ride today and a key trend-line is telling us that we should beware chasing this move and watch for a possible triangle tomorrow.

S&P is bullish and trying to re-test yesterday’s high, but two important levels of resistance are telling us to be patient and wait for a pullback tomorrow.

Gold is bullish, but three levels of resistance and one BIG clue in the candlesticks tells us the bears may get a great opportunity to take control tomorrow.

Euro is bullish and trying to finish a wedge target tomorrow, but we have a hidden channel on the chart, telling us to wait for more confirmation before we buy more.

FDAX looks bullish, but there’s an important clue on the chart telling us that this move higher may be nothing more than a great selling-opportunity for the bears tomorrow.

Crude Oil
Crude Oil is bullish and trying to finish off a measured-move and re-test yesterday’s high, but the trend-line and ‘triple-up’ resistance levels are telling us we need to be careful where and when we look for buying opportunities.  The strong move higher gives the bulls control, and they clearly bought the pullback to the moving-average, so it’s too late to buy now, but the next opportunity will be a breakout-pullback above the trend-line, just don’t buy into the ‘triple-up’ resistance.  If price pulls back lower, then we start looking for traps and failures below .65 and into the ‘battle zone’.  One thing to keep in mind, if we sink back to the ‘battle zone’, then this becomes a triangle, and our goal will be trade the rotation back and forth from there.

E-Mini S&P
E-Mini S&P is bullish and trading at the high of a channel and just a few ticks away from the measured-move, which tells the buyers to avoid buying into this resistance and wait for an opportunity to buy near the low of the channel tomorrow.  As discussed in last night’s newsletter, the buyers were waiting for a pullback off the highs to ‘buy low’.  The bulls got what they wanted and now we are making our ascent back up to re-test the highs.  Long-term bulls are already in this move, now short-term bulls are looking for opportunities to buy at support with plenty of room for a nice target.

Gold is bullish and trading off the highs after reaching multiple targets earlier today.  The buyers clearly got what they were looking for, pulled back to try again and got rejected on the re-test.  This failure to re-test the high tells us that buyers aren’t excited about buying this high, and they will wait for price to move lower before they try buying more tomorrow.  The big challenge is going to be this falling resistance trend-line in the way, which will give the sellers a big window of opportunity to grab control if they can grab it tomorrow.

Euro is bullish and trading at the measured-move on the way to reaching the wedge target tomorrow.  In a bull market, the buyers will keep buying until they reach their ‘objective’ which is usually a measured-move.  With that said, the bulls will be looking for a pullback to allow more buyers to participate at a lower price, or they need to see a successful breakout-pullback above the measured-move for a continuation up to the wedge target tomorrow.


FDAX is bearish and trying to re-test the lows tomorrow, and with price above the moving-average we know that sellers will be looking for traps at the next swing-high, and buyer-failures on the next pullback to give them the edge they need to sell back down to the low.  On the flip side, the sellers clearly took profit after they reached their Double-Down objective, and this bounce higher is going to give the buyers a chance to take control if they can hold this pullback and show us some strength for a move going back up to re-test today’s high.

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