Monday, May 1, 2017

Trading the '2-Try Rule’ | Crude Oil, Emini, Gold, Euro, FDAX - 05/01/17

“What we can or cannot do, what we consider possible or impossible, is rarely a function of our true capability. It is more likely a function of our beliefs about who we are.”

Crude Oil is bearish and trying to re-test the low, but we have the '2-Try Rule' in play… telling us to look for selling-opportunities, but keep an open mind for a failure and a reversal tomorrow.

S&P is range-bound with a bull-bias this evening, but the buyers just tried twice to finish the measured-move and appear to be failing… prompting us to look for selling-opportunities back to the low of the range tomorrow.

Gold is bearish, but it looks like price tumbled a little too far, too fast today, so we’re staying patient for more information, seeing easy opportunities on both sides tomorrow.

Euro is bearish and trying to make a run back to the lows, but a support trend-line is going to make us wait for traps and failures up in the ‘battle zone’ to avoid selling low tomorrow.

FDAX is range-bound coming off the May Day holiday, and with the markets closed today, we expect to see a decent gap at the open tomorrow as traders play ‘catch up’ from missing today’s opportunities.

Crude Oil Trading Strategy
Crude Oil is bearish and trying to re-test today’s low, but this rising support trend-line is getting in their way, and if they can’t reach their target after two tries… we’re likely going to see price push higher tomorrow.  The challenge for tomorrow is not selling into support; If price pushes lower, we will try to use this trend-line as resistance to avoid selling into the low of day (which is the objective at this point).  If price pushes higher, we expect the bears to walk away, giving the bulls the opportunity to buy low using a ‘2-legged pullback’ for a re-test of today’s high.

E-Mini S&P Trading Strategy
E-Mini S&P is range-bound with a bull-bias this evening after price rotated from the prior day low up to the prior day high, and now appears to be trying another rotation back down again.  This market got tossed around like a ragdoll this morning, but the major clue is the bullish move into the double-top and double-bottom, creating the trading-range.  The buyers then tried twice and failed to reach the measured-move before collapsing back into the range… telling us to look for selling-opportunities down to the low the range, or a successful re-test of the highs to renew life for the buyers.

Gold Trading Strategy
Gold is bearish after an overshoot at the low of the channel this evening, giving us concerns that this market may have gone too far, too fast this morning, and prompting us to wait for more information before taking any positions.  The big concern is the size of the channel.  The goal is to sell the high of the channel, but the bulls will most likely take control if price rotates all the way back to the channel high.  If price pushes lower, trying to finish off the Double-Down and measured-move, we need to avoid selling into the support levels waiting below.

Euro Trading Strategy
Euro is bearish on low-volume as the sellers have now tried twice to ‘sell high’ and re-test the low.  I don’t usually like to use multiple days of data, but we didn’t have much choice with so few candlesticks today, but looking left makes it easy to see the strong finish on Friday has led to the sellers trying to ‘sell high’ with a target back to the lows.  The challenge for the bears will be this rising support trend-line coming off the lows… causing us to stay patient for traps and failures up in the ‘battle zone’ to avoid selling into this obvious support level.  

FDAX Trading Strategy

FDAX is range-bound coming off the May Day Holiday which means markets were closed today, so we’re using last week’s information to prepare for the trading opportunities tomorrow.  As you can see, we finished the session inside a range on Friday, which means our plan is to buy the low, sell the high, avoid the middle, and focus on failures tomorrow until we see a successful breakout-pullback and a new trend develop.  One thing to keep in mind tomorrow… whenever the markets are closed, traders aren’t able to participate in the news that happened TODAY, which means we are likely going to see this market play catch-up tomorrow, which often results in a big gap at the open, so stay patient after the opening-bell tomorrow.

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