Tuesday, July 25, 2017

FOMC Day Trading Strategy | Crude Oil, Emini, Gold, Euro, FDAX

“Luck is what happens when preparation meets opportunity.” - Seneca

Crude Oil is bullish with a strong spike higher in the wake of this afternoon’s API Report, which tells us to look for one of five scenarios playing out ahead of tomorrow’s Inventory Report.

S&P is bullish with a Spike & Range, telling us to focus on failures to buy below the low of the range, with a target going back to re-test the high.

Gold is bearish, but struggling to re-test today’s low is a big clue, telling us to avoid chasing this move lower and focus on failures up in the ‘battle zone’ tomorrow.

Euro is bearish with a ‘nested’ head & shoulders pattern, but the most important clue for tomorrow is the lack of recent pullback, so we’re looking for a ‘trap high’ to sell down to yesterday’s low.

FDAX is bearish, but the Double-Down support level is too close for comfort, telling us that buyers have a short-term opportunity to grab the next ‘trap low’ for a move higher tomorrow.

Crude Oil Trading Strategy
Crude Oil is aggressively bullish with a strong spike to finish today’s session. 

Tomorrow is “Inventory Day”, which means ANYTHING is possible, but this spike tells us to look for one of five scenarios.

The spike higher will likely see a pullback and a new higher-high, so we’re looking for a Spike & Channel, Spike & Wedge, Spike & Range, or a Flag tomorrow.

Another possibility is a complete reversal, which would normally be unlikely, but with big news on the schedule tomorrow, it wouldn’t be surprising at all.

Crude Oil Inventory S/R Levels for Wednesday
49.39, 48.93, 48.47, 48.01, 47.55, 47.09

E-Mini S&P Trading Strategy
E-Mini S&P is bullish with a Spike & Range, which tells us to buy the low of this range using the '2-Try Rule', while avoiding the fake-out breakout above the range highs.

The goal for tomorrow is to use the ‘battle zone’, and possibly this resistance trend-line to focus on failures for a target going back up to the range high.

If you recall from last night's newsletter, yesterday was a range, so there is possibility for a buyer-failure, so keep an eye out for a successful breakout-pullback below this range low with a target going back to yesterday’s low.

Gold Trading Strategy
Gold is bearish, but after a strong move lower this morning we would expect to see an easy move back to re-test the low, which isn’t happening.

This lack of follow-thru tells us to avoid chasing this move lower, and wait for the opportunity to sell high with traps and failures up in the ‘battle zone’ tomorrow.

Euro Trading Strategy
Euro is bearish with multiple head & shoulders patterns and a target going back to yesterday’s low.

One thing that stands out on this chart is the lack of pullbacks on the way lower, which tells us to stay patient for a ‘trap high’ because there aren’t many sellers who want to sell this close to the lows, and we assume many of the sellers are waiting up in the ‘battle zone’ tomorrow.

FDAX Trading Strategy
FDAX is bearish, but the lack of open space to the downside tells us the buyers are inches away from grabbing control tomorrow.

As discussed in last night's newsletter, the sellers needed to get away from this Double-Down support level, and as we can see today, the bears have been trying to grind the market lower, with limited success.

At this point, the only option for the bears is to wait and sell at a higher price, which will most likely turn into a bull market at that point, so we’re looking to participate in the move higher by using a trap-low under the 33.5 tomorrow.

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