May 10, 2011

Day Trading Morning Prep Gold, Crude Oil, Dollar Index, Euro, E-mini Russell Futures

‘We are what we repeatedly do.  Excellence, therefore, is not an act, but a habit’ – Aristotle

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Let’s begin our morning routine with the economic news for today’s trading session.
8:20 Gold & Currencies OPEN
8:30 Import and Export Prices
9:00 Crude Oil OPEN
9:30 US Market OPEN
10:30 E-mini Reversal
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
Over the past 24 hours we’ve heard some important news about the markets we trade most.
Overnight members of the Fed were heard warning of interest rate hikes before end of 2011, the CME Group Exchange will be raising margins on Crude Oil Contracts (no telling how this will affect us), and there are rumors of a ‘new deal’ for Greece by the end of May.  Lots of information that will be pushing and pulling at the buyers and sellers today it will be exciting to see what the bulls and bears do with this information.
Looking at the news this morning we have early news @ 830am which will hopefully get us some trading opportunities early, but as you know, lately we’ve been seeing a late morning move, so we will be keeping our eyes open all morning.
As always, I’m watching the speed or the orders coming into the market along with  average true range (ATR) to find the best times to trade the markets today.
My trading method will work on ANY liquid market, here is what I’m focused on day trading today:
Crude Oil Futures
Crude Oil 89Range
The first thing I need to do is check the most important levels of support and resistance, and I use a slower timeframe for this.
 I can see that the 89range chart shows me a sideways range
inside of a price wedge just above the Big round number
of 100.0
Im going to now use this simple price patterns on a faster timeframe to make educated trading decisions this morning.
This slower timeframe gets me focused on the most important information, now I want a faster timeframe to show me more specific price levels to trade with.
Crude Oil 34Range
My 34range chart shows me the following:
  • Sideways trading range(s) in the white boxes
  • PHOD and PLOD
  • Price Channel in Pink Trend Line
  • Price Wedge(s) in Green/Yellow Trend Lines
  • Major Resistance overhead
  • BMT and OPEN below us

My plan of attack on crude oil will be quite simple this morning.  We are trading inside the PHOD / PLOD which makes this an Inside Trading Day.  I will be looking to trade ‘inside’ the range we are currently in, selling the highs and buying the lows.  This will include the white boxes that were drawn on the 89range chart. 

The price channel in pink dotted trend lines will be a good clue today.  We will check the dollar trend later this morning, but this bullish channel tells me buying pullbacks will be higher % today.

We have 2 wedges to watch today, and there may be more developing throughout the day today, and with a bullish channel, we know the direction we want to be trading with the wedge.  Look to buy at support or buy pullbacks until this trend changes directions.

I have the Big Money Trigger Line (BMT) and the OPEN of the day right below us, which will act like a price magnet, drawing price back down into the previous area this morning.

In addition, we also see major levels of resistance overhead at 103.77 and major support below us at 96.95 to give us some highs and lows of the larger range.

If price rises im selling the highs of the wedge at 102.50, selling the highs of the channel at 103.00 and selling the PHOD at 103.38 and finally selling the major resistance at 103.77.

Remember, im selling first as price rises, but i will Buy a Pullback at support when i see new higher highs.  Keep this in mind as prices keep rising through levels of resistance.

If prices fall, im avoiding the OPEN 101.17, avoid the BMT 100.72, and avoid the big round number of 100.00 as well.  These will be sloppy areas to trade around, so use caution.

As prices fall im buying support levels first at 101.00 the lows of the channel, buying 100.12 the LOD, buying 99.00 the PLOD and the lows of the trading range, and will end up buying the major support at 96.95

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    Joseph James - May 10, 2011 Reply

    here's gold review…

    – We’re reviewing the Gold Futures market and we see the following
    o Price Channel in pink trend lines
    o Price Wedge in Yellow trend lines below us
    o BMT and OPEN is below us
    o Trading above the PHOD
    o We are in a transitional area between the highs of the range we are in, and the lows of the range above us 22.1 is the high of this range.
    – With this information, my plan of attack will be as follows:
    – If price rises:
    o Im selling the highs of the channel, the highs of the range, and the highs of the day at 22.1
    o Im selling first as price rises, then if we see new higher highs I will then buy a pullback, never buying into the highs.
    – If price falls:
    o I want to use the PHOD as support, so buy the PHOD first, then sell below the PHOD
    o Avoid trading around the 1511.4 the OPEN
    o Avoid the 2.7 previous day’s OPEN this will be sloppy
    o Buy the support of 07.1 which is also the highs of the wedge
    o Buying the LOD at 1505.2, and buying the PLOD 1498.4, but use extra caution because the PLOD is also the BMT which is very sloppy.
    o Avoid trading around the 1500.00 level, so this area around 1500, BMT and PLOD may be challenging, so use caution.
    – The ultimate goal trading gold today is to sell the highs and buy the lows.
    – Avoid the middle, and wait for the best opportunities.
    – We’d LOVE to get the short off the highs of the wedge/channel, looks like there is plenty of room to drop.

    Joseph James - May 10, 2011 Reply

    935am est
    – We’re preparing for our next set of moves
    – Crude oil trading at the lows of the channel, we want to buy these lows
    – Our plan of attack on crude is as follows:
    o If price rises:
     Im buying pullbacks, buying the lows of this channel
     Im selling the highs of the wedge around 102.00
     I will sell the highs of the range at 103.0, 103.77 is the major resistance
     And if price keep rising I will buy pullbacks above
    o If price falls:
     I’m buying the lows of the price channel (here right now @ 101.00)
     Buying the lows of the sideways range at 100.00
     Beware trading around 100.0 it will be extra sloppy
     Buying 99.0 the lows of the wedge
     And then buying major support at 96.95
     As prices are dropping im buying at support, but then selling retracements as we make new lows
     Never selling the lows.

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