Head Fake or Price Reversal? | Crude Oil, Gold, E-mini & Euro Futures 09/12/16

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Notes for Tonight’s Newsletter:

Market are moving well going into Quadruple Witching; Crude Oil filled the weekend gap and will likely try to re-test the lows, the E-mini has been a wild ride, only touching the moving-average twice in the last two sessions, Gold appears to be trying give us a ‘head fake’ and the Euro is trading inside a range ahead of the opening bell in Asia on Tuesday.

Crude Oil is bullish and trying to re-test the highs but an overhead resistance trend-line is standing in the way and the weekend gap should give the buyers a reason to be worried that this may be nothing more than a head-fake before we go back to the lows tomorrow.  The weekend gap is a big deal, in most situations the market will come back to fill the gap and then return back to the direction of the original trend, and in this case that means that the sellers need to break-down below the battle zone for wide open space down to the low at 44.72 tomorrow.  Buyers, on the other hand, want to see the sellers fail for a move back to the highs but they will need to get a successful breakout-pullback above the resistance trend-line to do that, which the bulls will be waiting for tomorrow.

E-mini S&P is bullish and buyers will be looking for seller-failures below the moving-average for a target back to the highs, in fact, the move was so bullish today that we assume buyers will be scaling-into large positions all the way down to the reversal line at 27.50 unless the sellers can show us some strength going lower to prevent them from buying the pullback.  Sellers, if they can get a strong push lower, have the opportunity to hold the pullback for a target back to the battle zone and then a breakout-pullback below the 27.50 for a move back to the low of day at 27.50 tomorrow.

Gold is bearish, but with a recent strong move from the bulls we may see these bulls take control tomorrow if they can hold this next pullback.  The bears made a triple measured-move lower today and apparently took all their profit before the closing bell because price spiked higher, but not high enough to close above the first two swings of the session which tells the sellers to be looking for the buyers to fail on this next pullback for a move back to re-test the lows.  Buyers need to show us they want this by holding the pullback and making a new higher high.  It takes a very strong breakout to reverse the trend and this was indeed a very strong move higher which will likely give the buyers another leg higher if they can hold it here in the next few hours.

Euro is trading sideways inside a range this evening which means our plan for tomorrow will be to buy low, sell high, avoid the middle, focus on failures and use the pendulum swing until we can get a strong breakout of this range in one direction or the other.  The last test of the range was at the high, which means the rotation should send us back to the lows where buyers will be looking for seller-failures to buy the low and go back to the high.  Once back to the high, the sellers will be looking for buyer-failures to sell the high back to the low.  There is a small possibility that this lazy bull channel may plan a factor tomorrow, but thats unlikely because when the session starts in a range it usually will ignore these flat channel and stick to rotation from high to low.