The FOMC Announcement is behind us this evening, but that doesn’t mean we’re finished with today’s price-action – because tomorrow is “Reaction Thursday” – where the professional traders get back into the markets with confidence.
And the key to trading tomorrow’s session is being prepared for three different scenarios, which is why the “Rule of Three” is the topic of tonight’s newsletter.
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Crude Oil is bullish into a trading-range, which tells me to look for buying opportunities using seller-failures below the low of the range.
But don’t forget the sellers! Because they’re trying to sell the high of a long-term channel – which means we need to be prepared if they can hold!
E-Mini S&P is bearish with a strong run lower in response to the FOMC Announcement this afternoon, but this move lower was so extreme, I doubt any professionals are interested in selling way down here.
Knowing this, I'm going to wait patient to see how this market reacts to the move lower – knowing there will be three possible outcomes that I need to be ready for on Thursday.
Nasdaq is bearish with a tumble off the recent highs, giving the bears firm control of this market – but who wants to sell way down here? Not me!
Instead, I'm waiting to see if these sellers can actually hold the next pullback, and if successful, I'll be looking for a Spike & Channel pattern trading lower.
Gold is bearish with a strong run back to the low of the weekly trading-range, which is a great place to start buying – but not against all this bearish momentum, right?
A better strategy is waiting to see how these sellers react – do they hold? Do they fold? The key is going to be preparing for both scenarios, and I'll cover that in the video.
Euro is bullish in the long-term, but bearish in the short-term momentum – which tells me to look for buy set-ups, but only..
