Thursday’s Trading Strategy | SchoolOfTrade Newsletter 09/14/16

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Notes for Tonight’s Newsletter:

We’re heading into the second half of this Quadruple Witching Week with some excellent opportunities setting up for Thursday; Crude Oil is trading lower with a spike & channel, S&P is trying to breakout below the range from yesterday, Gold is trying to reverse a 2-day trend and the Euro is trying to make it four consecutive days inside a range tomorrow.

Crude Oil is bearish and trading inside a spike & channel this evening with a target down at 42.74 after today’s Inventory Report.  The sellers have control and will be looking for opportunities to sell the highs of the channel, the correction zone, or after a strong break-down that can hold below the channel low.  On the buy side, we have to assume that buyers are trying to call a bottom at the measured-move, but there isn’t enough proof yet in my opinion so we will be waiting for a strong breakout-pullback to hold above the channel high for a move up to the correction zone and possibly the battle zone overhead tomorrow.

E-mini S&P is bearish trading at the lows of a range and trying to finish the measured-move from yesterday’s trading session.  Sellers have control, but the breakout to new lows isn’t quite strong enough to give the sellers a clear edge, which gives the buyers a window to send price back into the range and requires the sellers to wait for more information.  Sellers need to see a strong break lower so they sell on the way down to Monday’s low and complete the measured-move.  Buyers on the other hand, would love to see a pullback to the moving-average FAIL for a buying opportunity going back into the range with a target back to the highs tomorrow.

Gold is bullish and trying to finish a move up to complete the wedge target at 31.5 tomorrow but the measured-move is standing in the way.  Buyers have control and will be looking for seller-failures if price pulls-back further and continuation set-ups if they can get a breakout-pullback above the measured-move on the way to the wedge and ‘double-up’ targets waiting above.  Sellers on the other hand, have a window of opportunity after seeing the bears test and hold the bottom of the wedge, and they will be looking for a strong breakout pullback to the downside to give them confidence to go looking for a move back to the lows at 16.6 tomorrow to finish a 2-day continuation that started yesterday.

Euro is trading off the highs of a range this evening which tells us to expect rotation back to the lows, but ranges don’t usually last more than three consecutive days in a row so we are keeping our eyes open for a breakout tomorrow.  The buyers have control and have tried once to breakout to new highs which tells us that they will most likely try again using the 2-try rule, so the bulls will be looking for seller-failure to go back to the highs and possibly make the breakout to a measured-move tomorrow.  Sellers on the other hand have already entered the trade short after the buyers failed at the highs and will be looking to add positions with a breakout-pullback below the low of the channel tomorrow with a target back to the lows.