Tuesday, October 24, 2017

Flag Pattern Trading Strategy | Crude Oil, Emini, Nasdaq, Gold & Euro



"Many of life's failures are people who did not realize how close they were to success when they gave up." - Thomas Edison.

Crude Oil is bullish with a Spike & Range pattern ahead of tomorrow’s Inventory Report, which tells me to look for buying opportunities below the range, down in the ‘battle zone’ tomorrow.

S&P is bearish with a flag pattern, which tells me to look for selling-opportunities using buyer-failures below the channel low tomorrow morning.

Nasdaq is bearish (with a possible flag pattern) and trying to re-test the measured-move, but a hidden channel support level is telling me to wait for confirmation before selling any more tomorrow.

Gold is range-bound in the middle of a triangle pattern, which tells me to focus on failures around the highs and lows of the range using the '2-Try Rule' tomorrow.

Euro is bearish with a flag pattern, telling me to look for selling-opportunities using traps below the low of the channel tomorrow.


Crude Oil Day Trading Strategy

Crude Oil is bullish with a Spike & Range pattern ahead of tomorrow’s weekly Inventory Report, which tells me to look for buying opportunities using seller-failures below the range low, preferably down in the ‘battle zone’ tomorrow.

If price pushes higher, Im going to avoid buying into the measured-move and channel-high resistance, but I will keep an eye on the personality because if today’s massive draw on the API report is any clue, this could be a very strong bullish session… and I will expect to be trading a Spike & Channel tomorrow.

One thing we can’t forget is that tomorrow is Inventory Day, which means ANYTHING can happen, so it’s best to get to the trades early, my cutoff is 10:15am EST, and wait for the crazy-train to pass us by @ 10:30am before looking for additional trading opportunities tomorrow.

Crude Oil Inventory S/R Levels for Wednesday:
53.14, 52.88, 52.62, 52.36, 52.10, 51.84

E-Mini S&P Day Trading Strategy

E-Mini S&P is bearish with a flag pattern and trying to re-test yesterday’s low, but this isn’t a very reliable place to sell because this is exactly where I’d be looking to buy if the trend was bullish.

My goal for tomorrow is to wait and see what we get from here.  If price collapses down to the lows, then my plan is to look for “traps” to avoid selling into the lows.

If price shoots higher, then im looking for signs that this trend has reversed, which would be the strength of the move higher, and if it doesn’t reverse, then I will continue looking for selling-opportunities using buyer-failure above the high of this short-term trading-range tomorrow.


E-Mini Nasdaq Day Trading Strategy

E-Mini Nasdaq is bearish (with a possible flag pattern) after a beautiful ‘2-legged pullback’ and now sellers are waiting to re-test the measured-move and possibly the prior week low tomorrow.

As we discussed in last night's newsletter, the goal was to sell up in the ‘battle zone’, so if you missed that opportunity, we don’t want to chase this move lower because there are clear signs of a possible “hidden channel” coming off today’s highs.

My goal for tomorrow is wait for more information at this point.  If price continues to push lower, I will then look for “traps” to avoid selling too low.

If price pushes higher, im watching the personality of the move higher.  If it’s a strong move higher, im looking for a reversal, but if we rotate higher we will still be bearish and I will look for buyer-failures up around the channel high.


Gold Day Trading Strategy

Gold is range-bound with a triangle pattern and sitting right on top of the prior month low.

The bears had control going into this range, so I will give the bears the directional bias going into tomorrow, so my plan is to look for selling-opportunities using the '2-Try Rule' up above the high of the triangle, while keeping an eye on buying opportunities using seller-failures below the range tomorrow.

Euro Day Trading Strategy

Euro is bearish with a flag pattern as the sellers try to re-test the range low, but you can see the higher-lows on the chart, creating the flag pattern.

The sellers are clearly defending their control, selling into each move that tries to turn the trend bullish, but still unsuccessful at re-testing those lows.

The plan for tomorrow is to wait for selling-opportunities below the low of this flag pattern, or look for buyer-failures up around the high of the channel.


The buyers certainly have a great opportunity to take control, but they need to show us they can hold a pullback after making new highs, because if they can’t, we will continue to see sellers fade every break higher.

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