Tuesday, August 29, 2017

“Parabolic” Trading Strategy | Crude Oil, Emini, Nasdaq, Gold & Euro

"Watch your thoughts; they become words. Watch your words; they become actions.  Watch your actions; they become habits.  Watch your habits; they become your character.  Watch your character; it becomes your destiny.”
Crude Oil is bearish, but tomorrow’s major news, combined with two big clues on the chart are telling us to wait for the buyers to FAIL before looking for selling-opportunities tomorrow.

S&P is bullish with a Spike & Channel, and with only a few points away from major targets overhead, we’re looking for a decent pullback off the highs for buying opportunities tomorrow.

Nasdaq is bullish with a strong bull channel, but one big clue on the chart tells us to beware the common TRAP on the next pullback and wait for a ‘2-legged pullback’ to the ‘battle zone’ tomorrow.

Gold is bearish with a parabolic move lower, so we’re waiting for this rally to subside and watching the '2-Try Rule' for selling-opportunities back down again tomorrow.

Euro is bearish with an inverted wedge and parabolic move back to the overnight low, which tells us to look for a short-covering-rally and selling-opportunities at resistance levels tomorrow.

Crude Oil Trading Strategy
Crude Oil is bearish and trying to re-test today’s low, but the strength of this correction, combined with the rising support trend-line gives us reason to wait for the buyers to try a second time before looking for selling-opportunities back down to the lows.

One thing to keep in mind, is the major inventory news tomorrow morning, which means ANYTHING is possible, and the odds of a trend reversal are HIGH.

The goal is to look for selling-opportunities after the buyers fail on their next attempt, while keeping our eyes open for a reversal and re-test of today’s high.

Crude Oil Support & Resistance for Wednesday:
47.09, 46.84, 46.59, 46.34, 46.09, 45.84

E-Mini S&P Trading Strategy
E-Mini S&P is bullish with a Spike & Channel, trading just inches below yesterday’s high, after the bears were unable to hold the '2-Try Rule' after last night’s gap-down.

This move higher was impressive today, with the only real pullback around 10:30am EST, which tells us that a LOT of buyers have been patiently waiting for the next pullback, increasing the odds of a re-test of the high.

The goal for tomorrow is to look for buying opportunities with traps and failures BELOW the moving-average because the moving-average is so close to the highs, we assume most buyers will be looking for a little more “meat on the bone”.

E-Mini Nasdaq Trading Strategy
E-Mini Nasdaq is bullish with a strong, multi-tiered channel as the bulls completely take back the gap-down from last night and begin hunting for the prior week and month targets overhead.

One thing that stands out on this chart is the lack of pullbacks, none of which tested the moving-average, which tells us that the next pullback to the moving-average will most likely be a trap.

The goal for tomorrow is to wait for a ‘2-legged pullback’ to avoid the trap, and look for buying opportunities at support levels for a target going back up to the high.

Gold Trading Strategy
Gold is bearish after buyers failed to hold the '2-Try Rule' after last night’s gap higher, and finished today’s session with a strong parabolic move lower.

Notice how the move lower got strong as the session developed, each candlestick getting larger as price pushed lower. 

This strength going lower is unsustainable, most sellers will see this as a good reason to take some profit, and that profit-taking creates bullish candles, which will give the “bottom pickers” reasons to start jumping into the long side.

This parabolic move all of a sudden creates a strong BULLISH reaction going higher, which is soon met with trend-following sellers as soon as we start testing levels of resistance overhead.

The goal is to let the buyers have this opportunity to take price higher, while using the '2-Try Rule' for the signal that the buyers are finished, and we can resume the trend lower.

Euro Trading Strategy
Euro is bearish with an inverted wedge and strong, parabolic move back to the overnight lows.

The strength of this move lower tells us to expect sellers to take profit, which usually results in a short-covering-rally higher, and when you combine that with today’s low, this becomes a risky place to start selling.

The goal for tomorrow is to wait for the short-covering-rally, looking for a ‘2-legged correction’ off these lows and selling-opportunities up at resistance levels overhead with a target going back down to re-test the low.

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