Next week’s predicted market ranges from Trevor Smith.

While the S&P 500 futures, Japanese yen, the euro, gold and crude oil have bearish technical tendencies from Friday Dec. 6, 2019 into next week, the breakout in crude is the current story.

Crude oil has been in a tight, narrow range for a very long time. Monthly charts show the volume of the May 2019 sellers, but the December 2019 buyers also had fortitude enough to form some hammer candlesticks. Crude may be in a failed Wave 3 uptrend from the January 2016. If crude is incapable of creating a Wave 3 up, some chartists will consider the July 2008 sellers’ high a starting point for a 3-Wave drop, currently in sideways Wave 2 consolidation.

Yesterday, I was thinking about buying crude hedged with puts, but today my trade idea is short crude into next week due to the inverted hammer candlestick pattern. I wish I could predict when the large breakout occurs, as in December 2019 or first-quarter 2020.

In this closing week, eight of 10 projected weekly ranges printed as of late Thursday night, although other range projections were extremely close to actual price range extremes. All three official option spread trades had underlying symbols trade beyond chosen strikes in winning directions, and the unofficial trades also worked.

Next Week’s Predicted Ranges

E-mini S&P 500
High Range: 3164.93-3143.50; Low Range: 3090-3075 (3060 outlier)
Buy weekly expiration 3130/3135 & 3125/3130 put spreads as price climbs on basis that 3115 is next week’s projected range midpoint below with $ADD/$ADVN sell candle Daily chart and lower highs in divergence to index

Japanese Yen
High Range 9256-9221; Low Range 9175-9150 
Buy 9200/9250 weekly expiration put spread on rallies toward 9230 if accepting next week’s pivot 9194 below is fair value; 9187 is my highest weekly low projection for next week still making put spread profitable.

Euro FX
High Range 1.114-1.111; Low Range 1.107-1.105
Sell 1.111/1.115 weekly expiration call spread toward 1.109,08 below at weekly pivot/range midpoint zone; volume-spiked inverted hammer sell candle on Dec. 4 daily chart.

Gold
High Range $1493-$1483; Low Range: $1472-$1466
Sell weekly expiration call spread $1480/85 strikes toward $1377 weekly pivot/range midpoint with 70 as target.

Crude Oil
High Range $6025-$5925; Low Range $5710-$5585
Sell $58/5850 weekly expiration call spread, as range midpoint/weekly pivot are $5812, 5770 below price; inverted hammer Daily chart with volume sell signal. Trade lightly in size due to coming massive breakout.

(Note: This article is published mid-day on Fridays and focuses on weekly options expiring the following Friday but may include monthly options or 2-week calendar/diagonal option spreads at times. I consider my week’s range accuracy from Fri. a.m. publishing until next Fri. a.m. as Trevor’s week for purposes of being aligned with potential weekly option trades placed Fri-Wed.)

Last Week’s Predicted-Versus-Actual Ranges

E-mini S&P 500
High Range:  3162-3152; Low Range 3132-3122 (3060 outlier)
Actual: 3158-3069
Buy weekly or monthly expiration 3145/3140 put spread if accepting 3138, next week’s weekly pivot, as fair value underneath current price.

Japanese Yen
High Range 9200-9170; Low Range 9116-9090 
Actual: 9228-9119
Buy 9150/9125 weekly expiration put spread if accepting next week’s pivot above is more fair value; price on multi-timeframe moving average cluster support; four-hour chart hammer low 

Euro FX
High Range 1.107-1.105; Low Range 1.101-1.099
Actual: 1.112-1.101
No official trade. Sell weekly expiration put spread up to 1.1025 weekly pivot/range midpoint one if reversal signals emerge as strong as present in Yen

Gold
High Range $1480-$1474; Low Range $1457-$1452
Actual: $1489-$1459
No official trade because bullish weekly chart contradicts bearish monthly chart. $1465/70 strikes to sell either a call spread (bearish trade) or sell short a put spread (bullish trade); as both could win.

Crude Oil
High Range $5948-$5830; Low Range $5695-$5585
Actual: $5912-$5502
Sell $58/5850 weekly expiration call spread, as range midpoint is $5750 below price; short-term bearishness sets stage for monthly doji breakout higher into $60s-Jan/Feb short put spread trade idea.

See More analysis from Trevor here

Note: Nothing herein shall be construed to be specific financial advice. While reflecting my best good-faith efforts to forecast markets, no guarantees of accuracy are made from my range statistics, aggregate statistics, frequentist interpretations, and pivot math from hand calculations. I am a registered newsletter CTA, and all required disclaimers apply. Trade at your own risk with money you could discard/not miss.