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Watch this Rare Pattern | SchoolOfTrade Newsletter 01/04/16


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Crude Oil is trading inside a rare and powerful megaphone pattern which tells us to buy lows and sell highs of the expanding range tomorrow. The bulls will be looking for new higher-highs to buy pullbacks with a target up at the highs. If we can test the highs around 38.60 we will then expect to see sellers enter the market for selling opportunities at the highs. The bears will be looking at this as a bear-flag, which tells us to wait for 3 attempts to push higher and then buyer-failure to sell short back to the lows, but remember that we want to BUY the lows if it makes it back down to the lows of the range tomorrow.

E-mini S&P finished the session looking very bullish this afternoon and the sellers MUST respond to the key resistance level at 2010.00 if they are going to keep this price moving lower tomorrow. The bears started the session with a spike and channel this morning and we are now testing the base of the bear-channel which tells us the sellers need to hold this resistance if they want to keep this price moving lower. The bulls are showing remarkable strength as the session finished today with their own bullish spike & channel, which tells us the next pullback is going to be critical telling us where we are likely headed next.

Gold is pushing lower this evening after the bulls took price higher in today's session, which tells us to look for channel-rotation, measured-moves, and a possible gap-fill tomorrow. The bulls took price higher today with a perfect measured-move higher, but then the bulls failed to keep control later in the session and we clearly now have the bears taking their turn back in the opposite direction. Bears will be looking for selling opportunities down to 1064.5 and possibly all the way to fill the weekend gap at 1061.1. The bulls need to see a new higher-high combined with holding the first pullback if they want any chance to save this from the low.

Euro is bearish with a major channel and a short-term spike & channel which provides us with plenty of areas to look for selling opportunities on Tuesday. First, the bearish spike & channel tells us to look for selling opportunities after we test the 1.0884 resistance overhead, we will look for the next pullback to fail. Second, the high of the major bear channel will be an almost 'too perfect' area of resistance to sell overhead, so wait for the buyers to fail on the first pullback. Third, we have the range-high from today at 1.0967 which is likely going to be tested of the highs of the bear-channel cannot hold. The ideal scenario is to sell the highs of the channel but that looks too easy, so look for a trap at the highs and sell after they run out the weak sellers!

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