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We had some BIG moves on the charts today, but looking deeper into the charts, it’s easy to see that the ‘pendulum swing’ strategy is going to be the most effective way to plan our entries and exits for Wednesday's session.
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Crude Oil is racing higher back to the monthly highs with a short-covering rally off today’s low, which tells me to find a shallow pullback before I miss the finishing drive up to the highs.
Knowing this, I'm keeping my eyes open for a Spike & Channel or a trading-range, and once I know what we get, then I start looking for the entry pattern from there.
E-Mini S&P is bearish and trying to finish the ‘pendulum swing’ target back below the range low, but look closely and you can see we’re sitting in the middle of this range – a horrible place to trade.
Keeping this in mind, I'm going to wait for my shot to sell off the high of the range using a buyer-failure pattern, or wait to buy the low of the range using the “nested” failure set-up.
Nasdaq is bullish with a Spike & Range pattern, which tells me to look for buying opportunities below the range using the 2-Try Failure pattern.
Furthermore, if the buyers try to breakout of this range to new highs, I need to stay patient and see how the markets respond.
If it’s strong, I can trade the 2-Try Breakout Pattern if it’s on strength, but weakness for the bulls will tell me to fade the breakout back down again.
Gold is bearish with four legs lower into a narrow trading-range, which tells me to sit-on-hands and wait for price to pop higher so I can sell into the stops of the buyers looking for the reversal.
Speaking of the reversal, it’s also easy to see a major ‘pendulum swing’ support level right at today’s low, which encourages us to watch for a short-covering rally and the buying opportunities that come with it tomorrow morning.
Euro is bearish with a flag pattern, and with this flag pattern “walking on thin ice”, my plan is to wait and see how this market responds.
If we see the failure, then I look for the Hidden Channel pullback off the highs.
But if we shoot back up through the highs, then I know this was just a pullback in an overall bullish move, and my focus moves to buying with bear-traps.