February 5, 2014
- in Uncategorized by schooloftrade
Volatility is BACK! All eyes shift to Friday’s Report | Newsletter 02/05/14
“What we
can or cannot do, what we consider possible or impossible, is rarely a function
of our true capability. It is more likely a function of our beliefs about who
we are.”
Reflections from
Today:
Today:
·
Weak
Employment, Bad Weather, Friday’s Non-Farm Payroll Report weighing on the
markets today.
Weak
Employment, Bad Weather, Friday’s Non-Farm Payroll Report weighing on the
markets today.
·
We
expected a volatile session, which is exactly what we got
We
expected a volatile session, which is exactly what we got
·
ADP
Employment comes in lower-than-expected, Gold moves higher (+175k)
ADP
Employment comes in lower-than-expected, Gold moves higher (+175k)
·
ISM
Non-Manuf. comes in better-than-expected, but new orders still very weak, Crude
Oil and Equities fall lower
ISM
Non-Manuf. comes in better-than-expected, but new orders still very weak, Crude
Oil and Equities fall lower
·
Crude
Oil Inventories; higher inventories & less demand, Crude Oil drops
Crude
Oil Inventories; higher inventories & less demand, Crude Oil drops
·
Markets
trading ‘in balance’ ahead of Friday’s Non-Farm Payroll report
Markets
trading ‘in balance’ ahead of Friday’s Non-Farm Payroll report
·
Crude
Oil went lower (-.45% @ 97.32)
Crude
Oil went lower (-.45% @ 97.32)
·
Gold
went higher (+.25% @ 1257.3)
Gold
went higher (+.25% @ 1257.3)
·
Mini-Russell
went lower (-.50% @ 1089.9)
Mini-Russell
went lower (-.50% @ 1089.9)
·
Thursday; Jobless Claims, International Trade,
Productivity & Costs, all eyes on Friday’s Non-Farm Payroll
Thursday; Jobless Claims, International Trade,
Productivity & Costs, all eyes on Friday’s Non-Farm Payroll
·
This
day in history: Feb 5th 1790
was the first Census is conducted in the US
This
day in history: Feb 5th 1790
was the first Census is conducted in the US
Economic News for
Tomorrow:
Tomorrow:
Thursday morning has a LOT of big news scheduled at the
beginning of the session so we will need to be ready for trading opportunities starting
at 8:00am EST.
beginning of the session so we will need to be ready for trading opportunities starting
at 8:00am EST.
 |
| News Worksheet |
8:30am EST: International
Trade
Trade
8:30am EST: Jobless
Claims
Claims
8:30am EST: Productivity
& Costs
& Costs
10:30am EST: Natural
Gas Inventories
Gas Inventories
Friday AM: Non-Farm
Payrolls
Payrolls
Day trading plan for
Tomorrow:
Tomorrow:
Crude Oil:
VIP Chart:
 |
| Crude Oil VIP Chart |
Crude Oil was very sloppy today because of the Inventory Report
which came out at 10:30am EST and drove prices lower on higher inventories and
lower demand.
Today we had a sideways range, in a very typical trading-range,
and the closing-print was dead-centered in the middle of the range.
and the closing-print was dead-centered in the middle of the range.
These three clues tell us that the market-sentiment is
completely balanced right now, and we can assume traders are waiting for
tomorrow’s Jobless Claims or Friday’s Non-Farm Payroll report.
completely balanced right now, and we can assume traders are waiting for
tomorrow’s Jobless Claims or Friday’s Non-Farm Payroll report.
I am looking for buying
opportunities above 98.14 tomorrow, and I will look to sell short below 96.78.
opportunities above 98.14 tomorrow, and I will look to sell short below 96.78.
Anchor Chart:
 |
| Crude Oil 34 Anchor |
The anchor chart of Crude Oil shows us a consolidating market-structure
this evening. We can see lower-highs and
higher-lows on the (34) anchor chart and we are getting VERY close to the end
of this price wedge, which tells us a breakout is likely just around the
corner.
this evening. We can see lower-highs and
higher-lows on the (34) anchor chart and we are getting VERY close to the end
of this price wedge, which tells us a breakout is likely just around the
corner.
 |
| Crude Oil 13 Anchor |
As we move closer on the anchor chart (13) we can see the
very narrow price wedge with trend-lines at the highs and lows. We can also see a short-term trend that is
bearish, and with the moving-averages above us right now we can confidently
sell short with a profit-target at the lows around 96.80 – 96.69.
very narrow price wedge with trend-lines at the highs and lows. We can also see a short-term trend that is
bearish, and with the moving-averages above us right now we can confidently
sell short with a profit-target at the lows around 96.80 – 96.69.
I want to sell short at
this time, however, we are in the middle of the price wedge so I know this will
be a low-percentage trade.
this time, however, we are in the middle of the price wedge so I know this will
be a low-percentage trade.
Gold:
VIP Chart:
 |
| Gold VIP Chart |
Gold was FUN to trade today in our Live Trade Room. We had some great volatility early in the session
which allowed us to hit our daily goal before lunchtime.
which allowed us to hit our daily goal before lunchtime.
Today we had a bullish market-personality, a very wide trading-range,
and a closing-print that went all the way back down into the lower-middle…almost
where we began the session.
and a closing-print that went all the way back down into the lower-middle…almost
where we began the session.
The VIP chart tells me
that we have a ‘balanced’ market-sentiment going into Thursday. I am buying with an opening-print above
1274.5, and selling with the opening-bell below 1251.8.
that we have a ‘balanced’ market-sentiment going into Thursday. I am buying with an opening-print above
1274.5, and selling with the opening-bell below 1251.8.
Anchor Chart:
 |
| Gold 34 Anchor Chart |
The (34) anchor chart of Gold shows us that price-action is
moving higher, but it keeps running into the sell-zone overhead at 1274.5 which
is creating a bit of consolidation in the short term.
moving higher, but it keeps running into the sell-zone overhead at 1274.5 which
is creating a bit of consolidation in the short term.
 |
| Gold 21 Anchor Chart |
When you move to the (21) anchor chart you can see the
bullish price channel has formed which tells us that BUYING at support (discounted
price) will be the high-percentage-trade going into Thursday. Ideally, I would like to buy the 1231.0 area
if the price-action pulls back, and I want to take profit at the resistance above
around 1274.5.
bullish price channel has formed which tells us that BUYING at support (discounted
price) will be the high-percentage-trade going into Thursday. Ideally, I would like to buy the 1231.0 area
if the price-action pulls back, and I want to take profit at the resistance above
around 1274.5.
 |
| Gold 13 Anchor Chart |
Watch out! The (13)
anchor shows us a very similar market-structure as Crude Oil this evening. We can see price-action is in the middle of
this short term price wedge, and with a short-term trend that is bearish we can
confidently sell short as long as we see the proper entry pattern.
anchor shows us a very similar market-structure as Crude Oil this evening. We can see price-action is in the middle of
this short term price wedge, and with a short-term trend that is bearish we can
confidently sell short as long as we see the proper entry pattern.
If I sell short this evening my profit-target
is down at 1245.7, but we know that when price-action is in the middle of a price
wedge we should sit-on-hands because this trade is much lower-percentage than
what we can get when we buy-the-lows at support and sell-the-highs at
resistance.
is down at 1245.7, but we know that when price-action is in the middle of a price
wedge we should sit-on-hands because this trade is much lower-percentage than
what we can get when we buy-the-lows at support and sell-the-highs at
resistance.
Mini-Russell:
VIP Chart:
 |
| Russell VIP Chart |
The Mini-Russell was another market that was FUN to trade this
morning in our Live Trade Room. The VIP
chart doesn’t make it LOOK as volatile as it really was in real-time. We sold right at the opening-bell this
morning and then bought the fake-out breakout at the PLOD around 1086.0 for a
nice profit selling, then buying back into the range.
morning in our Live Trade Room. The VIP
chart doesn’t make it LOOK as volatile as it really was in real-time. We sold right at the opening-bell this
morning and then bought the fake-out breakout at the PLOD around 1086.0 for a
nice profit selling, then buying back into the range.
Tomorrow I am selling
below 1078.0, and buying above the 1096.7.
Keep in mind, if we get long above 96.7 we have a big range to move into
all the way up to a profit-target at the highs around 1127.7.
below 1078.0, and buying above the 1096.7.
Keep in mind, if we get long above 96.7 we have a big range to move into
all the way up to a profit-target at the highs around 1127.7.
Anchor Chart:
 |
| Russell 34 Anchor Chart |
The (34) anchor chart shows us that price-action is trying to
break through a massive support zone this evening around the 1090.5 down to
1069.1. This tells us that selling short
MAY be a rocky ride lower overnight and into tomorrow, and we may even see a price-reversal
back to the 1100.0 big-round-number.
break through a massive support zone this evening around the 1090.5 down to
1069.1. This tells us that selling short
MAY be a rocky ride lower overnight and into tomorrow, and we may even see a price-reversal
back to the 1100.0 big-round-number.
 |
| Russell 21 Anchor Chart |
The (21) anchor chart shows us a strong bearish price channel
in both the short and long term trends.
When we see a bearish market-sentiment like this we know our job is to
sell when price is at a premium.
in both the short and long term trends.
When we see a bearish market-sentiment like this we know our job is to
sell when price is at a premium.
 |
| Russell 13 Anchor Chart |
The (13) anchor chart shows us trading higher into some major
sell-zones overhead that will make for a PERFECT selling opportunity this
evening and into tomorrow. I want to
sell short at 1091.5 and also up at 1099.1 to keep trading lower in this
bearish trend.
sell-zones overhead that will make for a PERFECT selling opportunity this
evening and into tomorrow. I want to
sell short at 1091.5 and also up at 1099.1 to keep trading lower in this
bearish trend.
If I can get into a
short trade tonight my profit-targets are going to be 1081.7, 1078.0 and then
1068.3 as the runner profit-target.
short trade tonight my profit-targets are going to be 1081.7, 1078.0 and then
1068.3 as the runner profit-target.
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