5 Trades for Wednesday | SchoolOfTrade Newsletter 11/29/16

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Crude Oil is bearish and trading with a ‘spike & range’ ahead of tomorrow’s OPEC meeting.

E-Mini S&P is range-bound and trading at the low of the range, trying to rotate back to the highs.

Gold is bullish coming off the low of a multi-day channel and trying to re-test the highs after today’s contract rollover.

Euro is bullish and trying to finish rotation to the high of the channel, and the FDAX is bullish and trading at the highs of a wide, almost flat bull channel, telling us both sides have opportunities tomorrow.

Crude Oil is bearish and trading with a ‘spike & range’ this evening after barely missing a quadruple measured-move ahead of tomorrow’s OPEC meeting.  The bears have control, but they won’t be interested in selling this low, so the most reliable selling-opportunities will likely occur up at resistance levels overhead, such as the high of the range, the reversal-line, and the battle zone overhead.   If price pushes lower, our goal will be to use ‘traps’ to avoid selling at the lows, so stay patient.  Buyers, on the other hand, will need to stay patient and wait for a strong move higher that can hold a pullback before we can even consider buying this market tomorrow.

E-Mini S&P is range-bound and trading at the low of the range this evening which tells us to look for buying opportunities off the lows using the ‘2 try rule’.  One thing buyers want to keep an eye on is the hidden channel just below the low of the range, which would give us a great buying opportunity just outside the range with a target going back to the high.  Our strategy for trading with a range is to buy the low, sell the high, avoid the middle, and focus on failures tomorrow until we get a strong breakout that can hold the pullback and develop into a new trend.

Gold is bullish coming off the low of a multi-day channel this evening, and buyers will be looking for trading opportunities going back to re-test the high at 97.2 tomorrow.  The bulls need to beware buying into the falling resistance trend-line coming overhead, and should look for a breakout-pullback above the trend-line or look for ‘bear-traps’ below the low of the channel, which can also be considered a triangle.  Sellers need to be patient right now, they rejected lower prices early in today’s session, so they need to either sell off the highs of the range, or they need to wait for a STRONG leg lower that can hold below the low of the channel.  The volume is low today because of contract rollover to the 02-17 contract, but that should clear up tomorrow when everyone joins us on the new front-month contract. 

Euro is bullish and trying to finish rotation to the high of the channel on the way to completing a measured-move tomorrow.  In a bull market, the buyers will keep buying until they reach their objective, which is usually the high of the channel or the measured-move, so our plan is to look for buying opportunities using pullbacks to support levels on the way up to the highs.  One thing to keep in mind is the un-tested reversal-line down at 1.06430, which is always a great support level in a bull market.  Sellers need to be careful tomorrow because any pullback on the way back to the ‘battle zone’ will likely be considered a buying opportunity, which tells the sellers they need to see strength to the downside before they can consider trying to sell this market tomorrow.

FDAX is bullish and trading at the highs of a wide, almost flat bull channel which tells the buyers to beware trying to sell into the highs unless they can get a strong breakout-pullback above the channel highs tomorrow.  The big clue on this chart is the wide channel because it allows for both sides of the market to participate; the bears can sell off the highs with a target back to the lows, and the bulls can buy off the lows with a target back to the highs with almost the same reliability tomorrow.  Sellers want to look for a lower-low, and then hold the pullback off the moving-average or a reversal-line for the best trade short off the highs, and the buyers need to wait to see if they can push through the highs, or they need to stay patient and look for buying opportunities off the low tomorrow.