A Few Key Markets You’ll Want To Watch Now

Welcome back, gang! Let’s take a look at 3 markets that are of interest to a lot of different people watching these videos tonight. Normally, we focus on various instruments up to and including Stock Index Futures. Tonight, however, we are going to turn our focus. We are going to start with the Euro. The Euro has taken a real beating and so many of my institutional and individual clients throughout the world want to know what is next for the euro. First things first, we have a positive divergence that is taking place in the Euro. We are back and testing very critical areas. This down trending channel is something that I’ve talked with you about many times over the past 6-7+ months. In fact, it was right back here where everybody got excited and asked me if it was time to buy the Euro. But we did not even get a close above that channel – that was the beginning of a whole new leg to the downside. It goes all the way back into last year where we had one close back above, and that was way back at the end of June of last year, it was the last time we hit that channel. So you can imagine, this is a big deal to be testing this area again all the way back down here. That is why I am showing this to you. So, what is real important here, and I’ve said this since last year, it’s been a good 8-9 months and everything holds true, it is important to revisit this since we do have a positive divergence. I want to get above the channel, hold above the channel and start to take back off the channel – show me that this channel is now support. When that happens, there is going to be a lot of people that are going to say ding-dong the witch is dead on my shorts and there are going to be a lot of bargain hunters that will come in. This could easily lead to some big moves to the upside. It has to start with getting above the channel, holding, and starting to take back off – show us that support – otherwise, as we pointed out in June of last year, it’s been resistance so that is why this is so important.

Gold is not a whole lot different. We are in kind of a weird situation with Gold – at a minimum, to be looking for anything other than a day trade long. Right now, going into tomorrow for instance, on a Wednesday, day trading longs in here from the midpoint of the channel to the upper end of the channel – no problem. There is some nice room to run in there and nice opportunity on an intraday long. However, if we want to look for substantial long side trades, as you can imagine, I want to get above that channel, pullback, and show me that it is now support. So, very much like the Euro, although, the Euro is a much cleaner chart to work with.

Speaking of another clean chart to work with – Crude Oil. This is one that everybody is asking me about. In my opinion, it still has not changed. It is the same situation here as we had more or less in the Euro. Except, that we are off by a few weeks. Back in July of last year, Crude Oil closed for a day above the channel and immediately went back down below. After that, it never looked back. It hit the channel over and over again. Down she goes. Here we hit the channel, but it did not close above there no matter how many times it hit the channel, and down she went again. Here we are, now we have a big, fat positive divergence – just like in the Euro – a nice clean divergence. And now we are testing the midpoint of the channel. It is a very exciting time for the Euro and Crude Oil. First things first, we have to get above the resistance, close up above it, pullback to make it support, and start to take back off. If that happens, a lot of those shorts are going to start covering, the bottom catchers are going to come in, and start look at this thing go back up above 100 so I want to get long. That could lead to some really fantastic short covering. You can see that there is a lot of spread distance between each of the down trending resistance levels leading to some really great opportunities for some fantastic runs back to the upside.

In particular, Euro and Crude Oil are both poised for some great reversals IF and only if we can get back above the channels, hold the channels, and start to take back off. Gold is not looking to shabby either. Tonight, I wanted to focus on those 3 instruments which a lot of you are concerned about as well. Of course, it makes for great trading. Have a great night. We look forward to seeing you in the Live Trading Room tomorrow morning or in tomorrow night’s videos. Take care everyone.

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