May 9, 2011
- in Uncategorized by schooloftrade
Dollar Gives me clues BEFORE Crude Oil Jumps to new highs
820am EST
– We’re reviewing the gold futures and we begin our week on the 89range
– This slower timeframe shows us the most important levels we need to focus our attention today
– Price wedge, within a price wedge. The highs of the bearish channel clearly show us a wedge, inside of a wedge.
– The bearish price channel tells us the sentiment is considering the short side.
– This bearish channel tells us this is a bearish wedge, so selling the highs and selling retracements will be considered higher % today.
– The BMT at 92.5 tells us two things:
o Do not trade there, the BMT is sloppy
o This market is now looking for new direction. Think of the BMT as your profit target, not your entry, so this is the END of the move.
– The Final thing we notice on the gold is the 1500.00 big round number is right in our way at this time, so beware.
Im preparing to take Fast Track and Advanced Method trades
The two reasons why we take these trades always follow the rules for the fast track:
– To earn the confidence of our guests
– To build confidence in our members who are just now learning
900am est
– On days like today we don’t expect very much early in the morning from Sunday’s mother’s day holiday and a Monday without any news
– It’s important that we prepare for a HUGE day, and then we are ready for anything the market gives us.
– I want to avoid “didn’t expect much, so I was NOT prepared”
905am est
– We have crude oil pushing lower at the 900am est open
– We see the dollar index is rising in a strong bullish price channel
– We see plenty of room for the dollar to keep climbing, which means plenty of room for the crude and gold to drop more.
– Make sure you keep an eye on the resistance on the dollar and when we hit resistance on the DX 06-11 contract we now need to look for the price reversal on both the dollar and the markets we trade most.
– Add a price alert indicator to the HIGHS of the channel
– This way we get an audio alert when the dollar has reached its highs, giving us a heads up to look for the reversal.
920am est
– We have the dollar at the highs of the channel, highs of the sideways range
– We now need to see where the dollar goes from here
– Will the DX fall from the highs or will it keep going to new highs?
– If we see new highs we will keep selling off on the markets we trade most.
– If we break down to the lows again the markets we trade will bounce off their lows and reverse back to the highs.
935am est
– We’ve been waiting since 800am for this market to pick up speed and start moving.
– The dollar is dropping off its highs and this is giving the buyers the chance to push price off the lows
– We have crude oil all set go, lets put together our plan of attack:
– Crude Oil:
o If price rises:
§ Selling first, then buying new highs with pullbacks
§ Never buy the highs
§ Avoid the 100.00 it will be sloppy
§ Sell the highs of the wedge at 100.25,
§ The highs of the wedge at 101.18
§ Sell the highs of the range at 102.38
§ Selling the HOD 106.69 and PHOD 102.50
§ We have additional resistance at 103.77 so look to sell
§ Im selling at resistance, looking for my rules to confirm
o If price falls:
§ im buying support first, then with new lower lows I can sell retracements
§ im avoiding the BMT at 99.27
§ im avoiding the OPEN 98.80
§ buying the the lows of the wedge at 99.00 which will be tough spot
§ im buying the lows of the day 98.99 support
§ buying the lows of the wedge 98.00 down to 97.51
§ buying the lows of the range 97.00
§ buying the lows of the major wedge at 95.35
950am est
– time is flying and the markets we trade most aren’t going anywhere fast right now
– this continues to confirm our assumption that Mother’s Day on Sunday and a Monday with no major news may be a sleeper.
– Look for the Golden Lunch after 11am EST today for some late morning moves.
– Crude oil trades at the 100.00 level once again, keeping us on the sidelines
– We see a bullish price channel in crude, which means we know the highest % trades will be
o Buying the lows of the channel
o Buying support levels below the lows of the channel
o Buying the entry back into the channel.
1000am est
We see sloppy and slow markets making us sit on our hands and wait for better price action
– Lets plan our attack on Gold Futures, open your 34range chart:
o DOLLAR = uptrend, this means selling the GOLD contract will be assumed higher %
o Price Wedge in yellow trend lines
o Sideways range(s)
§ PHOD and PLOD are BELOW YOU, making this an outside day (look for he breakouts, look for price to be attracted back down into the range below us)
§ And don’t forget the sideways range from 1510.7 down to 1498.5 which was made this morning
o Bullish price channel in the dotted blue trend lines
– If price rises:
o Selling resistance first, then buying pullbacks with new higher highs
o Selling 08.5, HOD at10.7, 13.8 major resistance, 22.1 major resistance
o Never buying at the highs
– If prices fall:
o Buying support first, then selling retracements with new lower lows
o Im not selling the lows, im selling retracements.
o Avoid the 1500 big round number
o Buy the lows of the channel and the LOD at 1498.5, but beware the BRN of 1500 right above you.
o Avoid the OPEN at 1503.4 it will be sloppy around the OPEN
o Buy the highs of the wedge at 1495.0 as support
o And when we break the support highs of the wedge we will then sell the wedge highs below 94.0, wait to get below the Big Money Trigger Line
o Avoid trading around the 1494.2 the BMT, this is expected to be sloppy
o Sell the wedge highs below the BMT, but get far away from the level as you can.
o Buy the LOD at 1489.0 as support, and then selling retracements with new lower lows.
o We want to be in short as price is falling to the lows of the price wedge at 1471.1
o Im buying the PLOD at 1474.6
1035am est
– Dollar makes new highs, but not making new lows on the markets we trade most
– This tells us ‘something’s wrong’ and to expect a big move here in the near future.
With the dollar index not making the correlation work on the crude oil, 1 of 2 things are likely to occur:
1. the dollar slows down and reverses and heads back to its sideways range, like nothing ever happened
2. the markets tied to the dollar (gold, crude, Russell, euro) will eventually begin to move down, using the higher dollar to give it a reason to drop.
Lets plan for whatever this market throws at us, but get ready for the late morning move.
– We usually see the ‘dead zone’ from 1030 to 1130, so look for this to be quiet right now, but be ready for volume later in the morning.
– Crude Oil:
o If prices rise im selling the highs of the wedge 100.25
o Im avoiding the 100.00 big round number
o Im buying a pullback if we make new highs 100.25
o Im selling the HOD at 100.69
o Selling the highs of the major wedge at 101.81
o Sell the highs of the bullish channel at 101.18
o Sell the entry back into the wedge below 100.25
o If price falls I’m buying support first, then selling retracements
1135am est
– We’ve had 6-8 winning trades in the past 45 minutes, hit our daily goal and knew this end of morning move was coming.
– We sold the highs of the wedge, we then bought the pullbacks and tried to take higher prices
– Now after the 1130am European close we see the price action slowing down, the ATR is falling, and it FEELS like the personality has changed.
– We were seeing fast speed, lots of big money and higher highs/lower lows for about 45 mins, but now it’s just changed for the worst.
