Wednesday, March 22, 2017

Market Psychology Strategy Thursday | SchoolOfTrade Newsletter 03/22/17

“My worst days as a trader are still better than the best days doing anything else.”

Crude Oil is bullish with two (2) important channels on the chart, but one of those channels is telling us to wait for proof of more strength, or wait for a deep pullback tomorrow.

E-Mini S&P is bullish and trying to determine if it wants to use a channel or a wedge, which tells us to be ready with two (2) strategies tomorrow.

Gold is bullish and trying to complete a triple measured-move tomorrow, and we have two (2) important clues telling us to be patient and wait for a DEEP pullback before buying more tomorrow.

Euro is bearish and trying to re-test today’s low, but two (2) levels of support, and a very interesting situation of market-psychology tell us to look for a correction before we get there.

FDAX is bullish and trying to return back to the round number at 12,000 tomorrow, but a trading-range on the chart is telling us that we need to avoid buying high, and look for traps tomorrow.

We have some incredible charts to look at tonight, 5 different situations that have all have great market psychology lessons to teach us going into Thursday’s session, and as always, I have a great video for you guys tonight, with plenty of reliable trading opportunities setting-up for tomorrow.

Crude Oil
Crude Oil is bullish and trying to finish a Double-Up and possible triple measured-move tomorrow, but the bulls just re-test the high, telling us that we’re likely going to see profit-taking, so our plan is to look for a trap down in the ‘battle zone’ to avoid buying high tomorrow.  We have two (2) channels on this chart, but the smaller channel is the most important.  The bulls took control of the market around 11:30am EST this morning, they got a classic ‘trap low’ after the change in trend, and they shot price up to the highs.  At this point, we need to see proof they want to go higher, or wait for a deep pullback to avoid buying the high.

E-Mini S&P
E-Mini S&P is bullish and trading in the middle of a channel and the lows of a potential bull wedge this evening.  The bulls have control in a rather week trend, which tells us to avoid buying into the highs, and focus on buying the deep pullbacks to the lows.  We also want to keep an eye on this rising support trend-line, which may develop into a wedge.  If price fails to rotate back to the low of the channel, then we know the buyers are using the wedge, but we need confirmation of that first, so stay patient.  The goal of the buyers is to buy the low of this channel, and if it turns into a wedge, then we look for traps below prior swings of the wedge.  It’s also important to remember that yesterday’s move was the biggest down-day of 2017, and this sluggish bull channel is certain to be viewed as a bear-flag on a larger timeframe, which is another reason to avoid buying into the highs, because we expect there to be selling waiting up there tomorrow.

Gold is bullish and trying to complete a triple measured-move this evening, but you can see the bulls have tried very hard today, and really haven’t made much progress, sitting right on top of yesterday’s high.  This bull channel is also an important clue to consider; it’s almost flat on the chart, telling us that the trend is bullish, but very weak, and we need to focus on buying low.  Knowing those facts, the most reliable buying opportunities will be after a correction below the low of the channel, the deeper the better in the eyes of the bulls tomorrow.  

Euro is bearish and trying to re-test today’s low, but the Double-Down and measured-move are major levels of support standing in their way.  The bears took control after the buyers failed to re-test the high, and with most trend reversals, we now find ourselves in a situation where the market is oversold and needs to correct higher to attract more sellers.  Anticipating a move higher will also make it appear this market is turning bullish once again, which is exactly where the wise sellers will be watching for buyer-failures to sell this market back down again tomorrow.


FDAX is bullish and trading just above the high of a trading-range, and at the high of a bull channel, as it tries to complete a measured-move and return back to the round number at 12000 tomorrow.  The bull channel is a great clue, telling us to look for buying opportunities at the lows, but I think the most important clue is the trading-range.  We can see that buyers were interested in buying the low of the range today, and we also know that most range breakouts fail, which reminds us to be skeptical of buying at the high.  Knowing those facts, the most reliable buying opportunities tomorrow will either be with a fake-out breakout pullback to the range-high, or a seller-failure at the range low tomorrow.

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