Tuesday, May 9, 2017

“Short-Covering Rally” Trading Strategy | Crude Oil, Emini, Gold, Euro, FDAX

“If we want to direct our lives, we must take control of our consistent actions. It's not what we do once in a while that shapes our lives, but what we do consistently.” 

Crude Oil is bearish and trying to re-test today’s low… but this afternoon’s API Report just sent prices racing higher… and the sellers need to get around this support trend-line before trying to sell this market tomorrow.    

S&P is bearish with a big “overshoot” of a channel… telling us to look for ‘traps’ up in the ‘battle zone’ and a target back to the low on Wednesday.

Gold is bearish… and this “short-covering-rally” is giving the sellers a perfect opportunity to “sell high” … so we’re watching for a pullback failure to sell down to the low tomorrow.

Euro is bearish… but we’re “two legs down” after the recent correction… telling us to avoid selling down at these lows, and watch for opportunities up at resistance levels overhead on Wednesday.

FDAX is bearish after the buyers failed to finish their objective… but this market is too low to sell at this point… so we’re waiting for a ‘2-legged correction’ to sell at a better price tomorrow.

Crude Oil Trading Strategy
Crude Oil is bearish ahead of tomorrow’s Inventory Report… but as you can see… this afternoon’s 4:30pm API Report… combined with sellers taking profit at the measured-move has given the bulls the opportunity to take control tomorrow.  The most important clue on this chart is that measured-move… they tested it once… and the odds are high they will test is again in the near future.  The only obstacle for the bears at this point… get below that support trend-line before they think about selling back down to the lows.  Buyers on the other hand… they need to hold a pullback and show us some continued strength to the up-side… because I’m sure a LOT of traders don’t believe this rally.

Crude Oil Inventory Levels for Wednesday:
46.80, 46.54, 46.28, 46.02, 45.76, 45.50

E-Mini S&P Trading Strategy
E-Mini S&P is bearish and trying to re-test today’s low… but a recent “overshoot” of this channel tells us to stay patient… looking for an opportunity to sell up above the channel for a big target waiting below.  If price tumbles lower… we don’t want to chase this move to the lows… so wait for a ‘trap high’ to keep following the market lower tomorrow.

Gold Trading Strategy
Gold is bearish and trying to re-test today’s low… but this strong “short-covering-rally” is threatening to reverse the trend tomorrow… so the plan is to wait for the bulls try to buy a pullback and then sell into their failure tomorrow.  If the bulls can hold this next pullback and make new highs… then we’re off to the races for a re-test of today’s high… but we need to see proof before we can buy it.

Euro Trading Strategy
Euro is bearish and trading at the Double-Down support this evening… but the biggest clue on this chart is that the sellers got their chance to ‘sell high’… and now we’re “2 legs down” which is a horrible place to look for selling-opportunities.  Everyone should be short, or taking profit on their short positions at this point… which tells us to look for selling-opportunities up at resistance levels overhead for a re-test of the lows tomorrow.

FDAX Trading Strategy

FDAX is bearish after the bulls tried twice and failed to re-test today’s high… prompting the bulls to exit their positions… and price collapsed off the highs.  Now the market is bearish… but far over-sold… telling us to look for a correction back to the resistance levels overhead for the next leg lower tomorrow.  Most important thing to remember for tomorrow… when the trend changes direction… the most reliable trading opportunities will usually be after a ‘2-legged correction’… so stay patient for it… and the target is back down to the low.

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