Tuesday, March 7, 2017

4 Ways to Trade with ‘Strength’ | SchoolOfTrade Newsletter 03/07/17

“Don’t Let Yesterday Take Up Too Much Of Today.”

Crude Oil is bearish, and today’s strong move lower, combined with this afternoon’s API report are giving us plenty to work with ahead of tomorrow’s inventory report.

E-Mini S&P is bearish, but the way this almost flat channel is screaming at us to be careful tomorrow.

Gold is bearish, and one key level of support is telling us to be watching for a spike & channel tomorrow.

Euro is bearish, but we have two clues telling us that the sellers are in a ‘fill or kill’ situation going into tomorrow’s session.

FDAX is trading sideways, and two trend-lines are telling us exactly where (and where NOT) to be looking for trades tomorrow.

Crude Oil
Crude Oil is bearish, sitting at yesterday’s low, with two big legs down after this afternoon’s API report was released at 4:30pm EST.  The bears clearly have control, and this strong move lower tells us to be looking for a spike & channel, spike & range, spike & wedge, or a flag tomorrow.  No matter what pattern we get, we assume that sellers will be weary of selling this low, and will be looking at overhead resistance levels as more reliable ways to sell high tomorrow.  With that said, its also important to remember that strong trends on Tuesday often lead to big corrections on Wednesday ahead of the Inventory News at 10:30am EST, so we will be watching for buyer-strength and a successful breakout-pullback for this to be a short-term bull market tomorrow.

API Levels for Wednesday: 53.74, 53.43, 53.12, 52.81, 52.50, 52.19

E-Mini S&P
E-Mini S&P is bearish at the measured-move and trading just off the lows of what we would consider a very shallow channel this evening.  The bears have control, but this channel is almost sideways, which can be traded almost like a range.  Our plan for the most reliable selling-opportunities will be to look for ways to sell high because selling low on a weak bear trend like this is asking for trouble.  We’re watching for the triangle resistance and the ‘battle zone’ for selling-opportunities tomorrow unless we see this market tumble overnight, at which time we will be looking for a breakout-pullback to the triple measured-move.

Gold is bearish at the quadruple-down this evening as it sits at the low of what we assume will develop into a spike & channel tomorrow.  Anytime we see a strong move in one direction like this we know to expect sellers to take profit and we will wait for a correction up to higher prices where we can attract more sellers again.  The quadruple-down is always a great clue that this market took the entire move it wanted today, and now we are waiting for a move back up to resistance so we can sell more tomorrow.

Euro is bearish, but after two tries to re-test the low, the sellers are in a ‘fill or kill’ situation this evening.  The day started with a strong move lower, which tells us that sellers would be trying to re-test the low, but we can see the sellers keep trying to ‘sell high’ and have struggled to get back to the low.  We don’t want to sell these lows, so our best option will be looking for buyer-failures up above the resistance trend-line, or a successful breakout-pullback below the low of day.  One thing we will be watching for is a reversal, which will start with a strong move higher and give the buyers a successful breakout-pullback above the resistance trend-line for a move back to re-test the high.


FDAX is trading sideways in the middle of a range this evening, which tells us to sell the high with buyer-failures, buy the low with seller-failures, and avoid the middle of the range like the plague.  The biggest challenge for range situations is staying patient for those breakouts that LOOK like enticing for those rookie traders out there.  Yes, sometimes the breakouts will work, but most of the time they will fail, and we want to be trading on the right side of the math tomorrow, so stay patient until we see a successful breakout-pullback outside of this range.

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