Monday, August 14, 2017

“Spike” Trades for Tuesday | Crude Oil, Emini, Nasdaq, Gold & Euro

“Successful and unsuccessful people do not vary greatly in their abilities. They vary in their desires to reach their potential.”  

Crude Oil is bearish with a strong spike lower, telling us to watch for one of four “spike scenarios” on Tuesday.

S&P is bullish with a Spike & Range, telling us to focus on failures below the short-term trading-range, preferably down in the ‘battle zone’ tomorrow.

Nasdaq is bullish with a Spike & Wedge, telling us to look for traps and failures on the way up to finish the wedge target tomorrow.

Gold is bearish, but they’ve tried and failed twice at a key support level from last Friday, giving us clues to begin looking for a price-reversal on Tuesday.

Euro is bearish, but a short-term trading-range tells us to avoid selling a break lower and focus on failures up in the ‘battle zone’ tomorrow.

Crude Oil Trading Strategy
Crude Oil is bearish with a strong “spike” lower, the prior day low, ‘battle zone’, and Double-Down on the chart this evening.

The strong spike lower is a great clue for direction, but we really don’t have enough information to know WHICH of the four “spike” patterns we will get tomorrow.  At this point, the Spike & Channel looks most likely, but we will need to see how the overnight session develops before we can be 100% certain.

The prior day low, along with the ‘battle zone’, will both act as resistance levels overhead, allowing the sellers to “sell the rip” with a target going back to re-test the low.

The triple-down will make for an excellent target for the sellers, assume we can get a retracement to “sell high” or a successful breakout-pullback to new lower-lows tomorrow.

E-Mini S&P Trading Strategy
E-Mini S&P is bullish with a Spike & Range, triple-up, and ‘battle zone’ for Tuesday.

The Spike & Range has a strong bull bias, and reminds us to avoid trying to buy the breakout higher (because most breakouts fail) and focus on failures below the low of the range.

The triple-up will be resistance, so we need to see a strong break higher if we want to be confident of prices reaching the quadruple-up target tomorrow.

The ‘battle zone’ will be a perfect location to buy below the range, with enough room back to the overhead resistance, with a nice runner target up at the quadruple-up target tomorrow.

E-Mini Nasdaq Trading Strategy
E-Mini Nasdaq is bullish with a Spike & Wedge, Trading-Range, ‘battle zone’, and Double-Up to work with tomorrow.

The wedge is a clear directional clue, telling us look for traps and failures below prior swings, with a target going up to the completion of the wedge tomorrow.

The short-term trading-range tells us that buyers are growing weary of buying this high on the chart, so the best option will be to use the '2-Try Rule' and focus on failures for buying opportunities below the range tomorrow.

The ‘battle zone’ makes for an excellent location to look for traps and failures, below the range, with plenty of wide open space for buyers to get excited about buying the pullback on the way up to complete the wedge. 

Gold Trading Strategy
Gold is bearish with a channel, wedge, and prior day low on the chart this evening.

The bear channel tells us that sellers will be trying to sell up at resistance with a target going back to the low.  As you can see, the sellers have tried twice to re-test the low and they failed both times now, giving the buyers the confidence to start looking for the long-side.

The Prior day low is acting as a big support level at this time, which isn’t a big surprise when you look at how bullish the market was last week before this pullback.  The fact that sellers are unable to hold below the prior day low is a BIG clue that this move lower may be nothing more than a nice buying opportunity for the bulls.

Lastly, the bull wedge, combined with the prior day high can both be used for targets to the long-side, all we need is the reversal.

Euro Trading Strategy
Euro is bearish with a Spike & Channel, Trading-Range, ‘battle zone’, and Double-Down on the chart this evening.

The Spike & Channel reminds us that this market has been bearish all day, and most sellers will avoid chasing this move lower, so the most reliable selling-opportunities will be with traps and failures above the previous swings.

The Trading-Range has a bear-bias, and reminds us that most breakouts FAIL, so the plan is to look for selling-opportunities above the range, or PROOF of a successful breakout-pullback below the range.

Putting all of this information together, the ‘battle zone’ overhead is an excellent location to look for reliable selling-opportunities using traps and failures that will avoid selling low and allow us to focus on selling up at resistance levels tomorrow.

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