Friday’s Trading Plan | SchoolOfTrade Newsletter 01/26/17

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“Repetition is the key to long-term success.  Some people think repetition is boring, while I see repetition as sharpening the knife of success.”

Crude Oil is bullish and trading with a spike & range this evening, which tells us to look for buying opportunities at the low of the range using failures and traps tomorrow. 

E-Mini S&P is bearish, but after the last two runaway bull days, today’s pullback will likely be considered a ‘bull flag’ by most traders, who have been waiting patiently for an opportunity to buy at a lower price. 

Gold is bearish with a spike & channel this evening, which tells us to look for selling-opportunities up at resistance levels overhead. 

Euro is bearish and trading in the middle of a range this evening, which tells us to look for selling-opportunities up above the high of the range, with a target back down at the lows. 

FDAX is bearish, but after the last two days of strong bull runs, we know that most traders will see this as a bull-flag and will be looking for buying opportunities going back to re-test the high. 

Crude Oil

Crude Oil is bullish and trading with a spike & range this evening, which tells us to look for buying opportunities at the low of the range using failures and traps tomorrow.  If price pushes higher, we need to avoid buying into the highs, and wait for proof of a successful breakout-pullback before we start buying pullbacks.  Sellers, on the other hand, need to see strength to the downside and a successful breakout-pullback below the ‘battle zone’ if they want to take control and run this price back to today’s low.

E-Mini S&P

E-Mini S&P is bearish, but after the last two runaway bull days, today’s pullback will likely be considered a ‘bull flag’ by most traders, who have been waiting patiently for an opportunity to buy at a lower price.  The key trading a ‘flag’ is to look for failures and traps at the highs and lows.  As price tries to go higher, we want to resist the temptation to ‘buy high’ and look for a seller-failure or bear-trap to ‘buy low’ for a target back to the high.  If price goes lower, we will be looking for seller-failures at the rising support trend-line, low of the channel, and the measured-move.  One of the biggest clues on this chart is the way price appears to be stuck on the moving-average, telling us that buyers aren’t giving it much room on each move lower, and it won’t be until we can get some separation below the moving-average that we will be able to start selling.

Gold

Gold is bearish with a spike & channel this evening, which tells us to look for selling-opportunities up at resistance levels overhead for a target going back down to re-test the low tomorrow.  One thing to keep an eye on tomorrow is this rising trend-line coming up off the low, which tells us to look for a breakout-pullback below the trend-line for the most reliable selling-opportunities.  The trend-line also gives the bulls an opportunity to take control of this market, they need a strong push higher and a successful breakout-pullback above 91.1 to make a run back to the 1200 round number.

Euro

Euro is bearish and trading in the middle of a range this evening, which tells us to look for selling-opportunities up above the high of the range, with a target back down at the lows.  There is a possibility of a triangle, we just need to see if the sellers are going to use the resistance trend-line overhead, but that won’t change anything, we still want to ‘sell high’ above the range.  If price pushes lower, beware selling the low of the range, and make sure we get a successful breakout-pullback below the measured-move for another measured-leg going lower.  The buyers on the other hand, need to take control, and they can do that with a strong move higher and a successful breakout-pullback above the high of the range for a target going back to today’s high.

FDAX

FDAX is bearish, but after the last two days of strong bull runs, we know that most traders will see this as a bull-flag and will be looking for buying opportunities going back to re-test the high.  The bear channel tells us that the bears have short-term control, but the ‘grinding’ lower below the moving-average tells us that buyers are scaling into this move as price pulls back to fill yesterday’s gap.  The aggressive buyers will be looking for seller-failures below the low of the range, while the conservative buyers will be looking for seller-failures and traps above the range high for a target going back to re-test today’s high.  Sellers, on the other hand, need to see this market get some separation below the moving-average if they want to have the confidence in selling below the Double-Down tomorrow.