Wednesday, January 31, 2018

Megaphone Pattern Strategy | Crude Oil, Emini, Nasdaq, Gold & Euro



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Crude Oil is bullish and trying to reach a triple measured-move, telling me that we’re two legs higher, which tells me to focus on buying as low as possible, so I’m watching a “hidden channel” for reliable buying opportunities off support tomorrow morning.

E-Mini S&P is sideways with a megaphone pattern, telling me to focus on failures using the '2-Try Rule' to buy the low, sell the high, and avoid the middle.

Nasdaq is range-bound with a megaphone pattern, telling me to focus on failures tomorrow, buying low, selling high, and avoiding the middle.

Gold is bullish with a strong spike higher, telling me to look for buying opportunities at the moving-average and a symmetrical second leg going higher tomorrow.

Euro is bullish but range-bound, and I’m watching a “hidden channel” for buying opportunities tomorrow morning.

I have a pair of megaphone patterns on the charts, a triple measured-move, a few hidden channels, and a great strategy for the first of February…


Crude Oil Day Trading Strategy

Crude Oil is bullish and two legs higher this evening, telling me that buyers certainly have control, but my focus should be buying as low as possible because (outside of a VERY strong trend) when markets start testing their triple measured-move area we know that most buyers are already in the market from earlier in the day, and it will take lower prices to attract them back into the market again.

Another possible scenario is a range tomorrow, watching for a pullback that re-tests the highs but doesn’t keep going.  In that situation it’s a Spike & Range and we will focus on buying under the range lows.

E-Mini S&P Day Trading Strategy

E-Mini S&P is sideways, range-bound with a megaphone pattern, telling me to focus on failures using the '2-Try Rule' to buy the low, sell the high, and avoid the middle tomorrow morning.

The hardest part about Trading-Ranges (such as megaphones) is staying patient to wait for the sellers to try twice to break out of the range and then find buying opportunities going back into the range.

Breakouts often look VERY convincing, but until we can see a breakout that actually HOLDS the pullback and continues on strength, we must assume it’s still a range.


E-Mini Nasdaq Day Trading Strategy

E-Mini Nasdaq is range-bound with a megaphone pattern, telling me there is balance in this market, and my focus should be fading all the breakouts, buying low, selling high, and avoiding the middle until we can see a clear breakout into a new trend tomorrow.

Gold Day Trading Strategy

Gold is bullish with a strong bullish spike to finish today’s session, but as you can see there isn’t much to work with after contract rollover.

The strong bull move tells me to expect buyers to be waiting on the next pullback for a re-test of the highs, and potentially a symmetrical second leg higher tomorrow.

However, if the buyers can’t show some strength to new highs tomorrow, then we need to start thinking of this as a Trading-Range.  It’s easy to look left and see the highs and lows of the rollover day and see how we’ve rotated from the low back to the high.

If the buyers struggle to push to new highs, then we start looking for buyer-failures and a move going back down to re-test the lows.

Euro Day Trading Strategy

Euro is range-bound after buyers successfully re-test the highs of yesterday’s Spike & Channel pattern, but “rejected” the idea of buying to new highs.


After seeing price reject off the highs, now we look for buying opportunities at the lowest point of the pullback, and my goal is to use this “hidden channel” as key support for buying opportunities tomorrow.

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