Flags and Ranges for Wednesday | SchoolOfTrade Newsletter 12/06/16

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Crude Oil is bullish and trading at the high of a bear flag ahead of tomorrow’s Inventory Report.

E-Mini S&P is bullish and trying re-test the all-time high once again this week.

Gold is still trading inside a range, and buyers are still waiting patiently to buy the low.

Euro is bearish in the short-term as price pulls-back off yesterday’s high in the form of a ‘bull flag’. 

FDAX is bullish, but this move higher today is so aggressive that buyers are likely to take some profit on the trade, and start looking for a place to buy at a cheaper price. 

Crude Oil is bullish and trading at the high of a bear flag, after completing a triple measured-move this evening.  The buyers have control after a strong move lower today, but it’s hard to find reliable buying opportunities at this level of resistance, so the most reliable buying opportunities will be with a breakout-pullback above the channel high, or buying the low of the channel tomorrow.  Sellers on the other hand, may be waiting for this price to come higher so they can sell it back down to the lows again tomorrow, and the most aggressive bears will be selling the high of the bull channel while the more conservative sellers will wait for the failure at the lows of the channel.

E-Mini S&P is bullish and trying re-test the all-time high once again this week after a strong bull run this afternoon.  The buyers have control and the goal will be to ‘buy low’ using the low of the channel, measured-move support, and the reversal-line down at 08.50 tomorrow while avoiding the temptation to chase a move higher because there will likely be plenty of profit-taking up at those highs.

Gold is still trading inside a range, the same range from yesterday, and buyers are still waiting patiently to buy the low of the range or a successful breakout-pullback above the range highs tomorrow.  Sellers are also waiting patiently for the buyers to try and fail at the highs so they can sell off the highs.  No matter what happens though, the most important thing right now is to avoid the middle of this range because that is where the least reliable trading opportunities will occur, so stay patient and focus on failures at the edges of the range until we see a successful breakout in one direction or the other tomorrow.

Euro is bearish in the short-term as price pulls-back off yesterday’s high in the form of a ‘bull flag’.  Apparently, yesterday’s move was so strong that buyers still haven’t been enticed enough to re-enter this market, which has given the sellers the opportunity to grab control and pull price lower.   The bears have control, and they will be looking for selling-opportunities at the high of the bear channel, with a target at the prior week high and the reversal-line at 6685 tomorrow.  For the buyers, we assume that long-term bulls are buying each leg of this pullback, buying more as price pulls back further, but as for the short-term buyers, they need to wait for price to make the turn higher and then get into the trade as it breaks above and holds a pullback to the moving-average for a re-test of the high.

FDAX is bullish, but this move higher today is so aggressive that buyers are likely to take some profit on the trade, and start looking for a place to buy at a cheaper price.  The bulls have control, and the most reliable buying opportunities will come up previous levels of support, but often times strong moves like these have a way of correcting sharply as buyers exit their positions, so the best option is to wait for the correction, and then grab the move on the way back up to re-test the highs tomorrow.