Wednesday’s Trading Plan | SchoolOfTrade Newsletter 01/03/17

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Crude Oil is bearish, but sellers will need to stay patient for a correction higher or they need to see continued strength to keep selling lower tomorrow.

E-Mini S&P is range-bound and trying to rotate back to the highs of today’s range.

Gold is range-bound and sellers are trying to sell the highs of the range.

Euro is bearish and trying to make a move back to re-test the lows.

FDAX is bullish inside a flag pattern, but the holiday breakout is giving both sides of the market opportunities tomorrow.

Crude Oil

The bulls started strong this morning after we saw headlines of a production cut in Kuwait in the pre-market, but as you can see, the bulls lost control towards the end of the morning as price collapsed off its highs.  The sellers have control, and the spike & channel tells me to look for selling-opportunities up at the “correction zone” overhead or I need to see a lot of strength going lower in order to have confidence that the sellers have interest in selling ‘low’ for down to the round number at $50 tomorrow. 

E-Mini S&P

There doesn’t appear to much rhyme or reason to the E-Mini S&P this evening; after starting the day with a strong bull move higher, price then followed Crude Oil and collapsed back to the lows, only to see the buyers re-enter the market and finish the session with strength going higher.  The most important clue appears to be the buyers entering the market at the lows today, telling me that buyers rejected the higher prices earlier this morning, but were more than interested in buying low.  At this point, all we really have to work with is a trading-range from the low back to the high, we know that buyers have control, and I will be looking for buying opportunities with a valid trigger on the next pullback to the moving-average with a target just below the high.

Gold

Gold appears to be on the same wavelength as the S&P this evening; the day started bullish, then collapsed off the highs, only to be bought up at the lows with a strong move higher to finish the session.  The big clue this evening appears to be the falling resistance trend-line overhead, which is likely going to kill the confidence for the buyers, giving me a chance to sell off the highs using a failure set-up for a target back to the lows of this large bull channel on the chart, and possible all the way back to re-test the low of the day.  Sellers will be looking for opportunities to sell the high of the range, while the buyers will be looking for ways to buy the low of the bull channel tomorrow with a measured-move target to look forward to in the long-term.

Euro

The Euro is bearish and trying to re-test the lows, but the buyers have a chance to take control and fill the holiday gap waiting overhead.  The session started with a strong move lower and three legs down before the sellers took their profit and price corrected up into the ‘battle zone’ overhead.  At this point the buyers have a lot of momentum in the favor, but they need to hold a pullback above the ‘battle zone’ if they want to take firm control.  The sellers on the other hand would love to see the buyers fail so they can sell a retracement down to the lows and possibly a large measured-move target tomorrow.

FDAX

The FDAX is trading with a bull flag this evening after a low-volume move sent prices running higher over the holiday weekend.  The bull flag tells us to look for buying opportunities at the highs and lows of the channel with the most reliable trades coming at the lows with a target going back to the highs.  One thing to keep in mind is that this big move was a breakout from a trading-range which tells the sellers to be watching for the buyers to fail at the lows for selling-opportunities going back to range where it came from tomorrow.