Geithner speaks, Dollar drops, Crude and Gold POP off Tuesday’s Lows

845am EST
– We look at the dollar index a little closer this morning and we see a flat sideways wedge which tells me that there is no day trading bias for one side or the other.
– Sideways dollar = buy or sell on the markets we trade most.
– Narrow wedge on the dollar tells us this morning may be slow
– My goal is to focus on taking trades when the DOLLAR is at its extremes (highs or lows)
– Example: don’t trade the crude oil when the dollar is in the middle of its wedge. Look for your crude trades when the dollar is at the highs or the lows of the wedge.

900am est
– We begin to review crude oil futures
– We do not have to rollover crude oil contracts today because the volume is not higher on the 07-11 contract.
– When the 06-11 is lower total volume than the 07-11 we can roll this market forward
– We have crude oil news @ 1030am today and we know that there are three phase to the day when trading crude oil
– We will be waiting from 10am through 1035am looking to avoid the sloppiest time of the day
– Look for the best trades before 1015am, and then after 1040am EST
– It will be important that we don’t jump into the market too soon AFTER the 1030 news.
– We have a price wedge
– We have a long term bear channel, we are above the highs, and a short term bull channel and we are at the lows
– We see the PHOD and PLOD are below us, making this an OUTSIDE day
– The BMT and the OPEN are below us, so this is a BULLISH sign in the market, but it also gives us an easy plan of attack:
Lets plan our attack on crude oil:
– We are inside a bullish price channel, and we are now above the highs of the wedge.
– We want to see if the price keeps rising we want to buy pullbacks
– If the price reverses we want to trade short into the PHOD and the PLOD is our final target. We expect the range from Tuesday (below us) to act like a price magnet.
– Question is….who is in control? If the buyers are we are buying pullbacks….if the sellers are…we are selling retracements.
o If price rises:
 Im selling resistance first and then buying pullbacks with new higher highs.
 When I have resistance I sell, and when that resistance becomes support I am buying.
 Im selling the HOD 99.88, selling the highs of the channel, and the major highs of 99.65 at the top of the range
 As price makes new highs im not buying the highs im buying pullbacks.
o If price falls:
 Im buying at support first, then selling new lows with retracements
 Im buying support at the lows of the channel 98.44
 Buying support at the 34r trigger lines 99.40
 Buying support at the PHOD, but beware the OPEN is right below the PHOD so this will be sloppy, higher risk
 I will buy support 97.73 top of the major price wedge
 Buy the LOD 97.62 as support and then selling retracements if make new lower lows
 Avoid trading around the BMT 97.56 and the previous day’s open 97.11 will make a great final target, but NOT an entry location.
 If price falls we want to take advantage of the range below us. Look to sell below the previous high of day and take the price down to the previous lows.