Thursday’s Trade Plan | SchoolOfTrade Newsletter 10/19/16

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Notes for Tonight’s Newsletter:

Crude Oil is bearish after collapsing off last week’s high, E-mini S&P is bullish and trying to finish off the measured-move, Gold is bullish and trading near the lows of a range, and Euro is bullish coming off the lows of the range ahead of tomorrow’s ECB Announcement.

Crude Oil is bearish after collapsing off last week’s high and now sellers will be looking for the next opportunity to run this price back down to where the move began earlier this morning.  After such a strong move lower we know the sellers have control at this market and strong moves tell us we are likely going to see another leg lower which means sellers will be looking for opportunities at the moving-average, the high of the bear channel and the reversal line at 51.88 tomorrow for a target going back to test the correction zone from the spike & channel that started with last night’s API report.  The buyers, on the other hand, need to be patient right now because a move higher will run into resistance which means they need to get a strong move up above the 51.88 reversal-line and then hold a pullback for a move back to challenge today’s high, and the key word tomorrow is STRENGTH for the bulls because last week’s high was clearly an area of resistance the bears had been waiting for.

E-mini S&P is bullish and trying to finish off the measured-move they missed by less than a point earlier today but an overhead resistance trend-line might give them a run for their money and give the sellers a chance to send this price back into the correction-zone tomorrow morning.  The buyers have control but they weren’t able to get any of their targets today which could mean they will be coming back to get them or that this market needs to rotate lower to attract more buyers tomorrow.  Buyers need to see a breakout-pullback above the resistance trend-line without going too close to the high of day or run the risk of this market collapsing back down to the 2133 area tomorrow.  Sellers, on the other hand, have a great opportunity if they can hold this pullback and get below the reversal-line at 37.25 with a target down at 32.25 and possibly all the way back to the low of day at 26.50.

Gold is bullish and trading near the lows of a range and/or megaphone this evening which means we can expect buyers to be looking for opportunities to send price back to re-test the highs.  The bulls had a strong move higher and then kept trying to push higher but kept running into sellers which created the sideways range and buyers have been focused on buying the dips.  Buyers want to focus on pulling back to the lows of the megaphone and the use seller-failures for opportunities going back to the highs.  Sellers, on the other hand, will wait to sell the highs of the megaphone looking for buyers to fail at the ‘triple-up’ or they may get a break down below the low of the megaphone which will give them a chance to sell down to the reversal-line and possibly today’s low at 61.1.

Euro is bullish coming off the lows of the range this evening and trying to complete its rotation back to the highs before this market slows down ahead of tomorrow’s ECB Announcement.  Just as expected from last night’s newsletter, the sellers took full advantage of the ‘trap’ at the high of the range and sold it back down the low, and now the pendulum is likely to swing back in the opposite direction ahead of the news tomorrow.  The news plays a big role in where this market is headed tomorrow and we expect to see volume drop and consolidation around the 10,000 level until we hear from the ECB tomorrow morning.  The most important thing tomorrow will be to wait for the breakout of the range and then follow the move from there, keeping in mind that a failed breakout will give the buyers and sellers the opportunity to grab failures and fade the edges of the range.