Can I Short This Rally? Where’s the Best Entry?

Woah, what a move today!

Am I crazy to think about shorting this rally?

Emini is bullish, but we just retested today’s high and we have a range (magnet) below us…

Nasdaq is bullish too, but we just completed a measured-move back to the high of a spike and channel…

Crude Oil is bearish, and this recent 123-Reversal pattern tells me exactly where I should get short tomorrow morning…

I know, I know – I’m definitely looking for pullback entries on the Eminis tomorrow, but let’s see if we can get some shorts off the high too!

E-Mini S&P (ES):

E-Mini Keys to Success:

The Emini made a strong run higher into a range today and buyers are currently trying to complete their pendulum-swing rotation through the highs.

Buyers have control and will be looking for entries off the low of this new “hidden” channel ahead of the pendulum-swing target overhead. 

Buyers will also be looking for proof of a breakout, and if they get it, will look for pullback entries on the way up to a new measured-move target using the breakout leg.

We also have opportunities to get short at these highs, but I’ll need to see buyers show signs of exhaustion with a 2-try failure to trigger the short off the high.

E-Mini Nasdaq (NQ):

Nasdaq Keys to Success:

Nasdaq raced higher into a range, then broke higher into a spike and channel pattern.  Spike and channels are one of my favorite chart patterns because they tell us to buy the pullback down near the “base” of the new channel.

Buyers have control, but with this recent retest of the high, we need to wait for more information.  Will we go sideways?  Keep running higher?  Pullback off the highs?

I would expect a range tomorrow – anytime we see this big of a move in one day, the following day is often a range. 

It’s best to wait for that range, then look for buy setups at support levels below it, or breakouts going to new highs.

What about the short side? Not a bad idea because we’re sitting at major resistance, but with all this bullish momentum I’ll need to wait for either a 2-try failure to short the high, or a 123-reversal and sell the first pullback.

Crude Oil Futures (CL):

Crude Oil Keys to Success:

Crude Oil ran higher into a range today, then got a breakout into another range before collapsing back into the original range from earlier in the day.

Bears have control of momentum at this point, and with a resistance trend-line overhead and a range “magnet” below, it’s easy to assume sellers will be looking for entries off that trend-line ahead of a possible pendulum-swing going lower.

If price continues to grind lower, sellers can start looking for shorts off the high of a new hidden channel using bull-traps and buyer failures on the pullbacks.