Trading With 'Traps'

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We saw some BIG RUNS in today’s session, but it looks like a few of these markets have reversed momentum, which usually means there will be opportunities to “trap” some trend-followers on the wrong side of the market tomorrow morning.

Crude Oil is bearish after the buyers failed to hold the pullback, but I’ll bet we’re still going to see a few bulls trying to force this higher, and if we do, I’m looking to “trap” them on the wrong side of the market tomorrow morning.

E-Mini S&P is bullish with a Spike & Range pattern, which tells me to use the trading-range to find reliable support levels to buy with on Wednesday.

Nasdaq is bullish with a Spike & Channel pattern, which tells me to look for “bear traps” down below the swing-lows on the chart tomorrow.

Gold is range-bound with a triangle pattern, which means I’m looking for opportunities to fade the breakouts on Wednesday using the ‘2-Try Rule’.

Euro is bullish with a strong move higher, and I’m waiting for either a deep pullback or an aggressive 2-Try Failure if we go higher.

Crude Oil is Bearish After Buyer Failure

The bears have control of Crude Oil after the bulls tried and failed to re-test the high.

This failure tells me to start looking for selling-opportunities using resistance levels, such as the high of the new channel.

Knowing this, my goal is to wait for an opportunity to sell into the stops of the buyers who are “trapped” on the wrong side of this market.

E-Mini S&P is Bullish with a Spike & Range

The E-Mini S&P is bullish after a string of positive news was released shortly after the opening-bell this morning.

The bullish momentum tells me to look for buy set-ups at key support levels, and I have my eyes on the location where the reversal-line and Hidden Channel intersect tomorrow morning.  

Knowing this, if price pushes higher, I want to resist the temptation to buy high and wait for a 2-Try Failure from the sellers so I can buy into their stops as they are trapped on the wrong side.

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