July 3, 2012
- in Uncategorized by schooloftrade
US Dollar Index and Crude Oil Futures Technical Analysis Prep
830am EST
The dollar index is trading above the PHOD so this is an
outside trading day (buyers in control).
We know the price wedge lows held as support and price is moving higher
into the overhead trigger-zone resistance.
We know the dollar index has NO VOLATILITY right now according to the
heat map on our blog. This tells us that
this higher-high on the dollar index may be short lived and price may do 1 of 3
things.
First, the dollar index may keep moving higher, and if that occurs,
Crude Oil (our biggest mover on the heat map
higher) will begin to peel off the highs, slowing down with speed, fewer buyers,
and we will be looking to sell at the highs we made this morning.
Crude Oil (our biggest mover on the heat map
higher) will begin to peel off the highs, slowing down with speed, fewer buyers,
and we will be looking to sell at the highs we made this morning.
Second, the dollar index may sit sideways and get stuck on top of the PHOD. This will tell us the lack of movement willresult in other markets getting ‘stuck in the mud’. Crude Oil may sit at a transitional point,
around a swing-high or sitting at trigger-zone support and we may need to trade
a short-term sideways trading
range or sit on hands and wait for the price to breakout.
Third, the dollar index may hit this PHOD as resistance and
rollover and tumble. If the dollar index
tests the PHOD and then fails, it’s a HUGE clue for a falling dollar index,
which will mean higher-highs and buying opportunities on the markets we
trade. Example, if Crude Oil is sitting
at HOD and the dollar index pushes lower off the PHOD then we will wait for the
fake-out breakout and then buy pullbacks with new higher-highs on Crude Oil.
rollover and tumble. If the dollar index
tests the PHOD and then fails, it’s a HUGE clue for a falling dollar index,
which will mean higher-highs and buying opportunities on the markets we
trade. Example, if Crude Oil is sitting
at HOD and the dollar index pushes lower off the PHOD then we will wait for the
fake-out breakout and then buy pullbacks with new higher-highs on Crude Oil.
845am EST
Crude Oil futures trading OUTSIDE DAY above the PHOD and we’reseeing the most movement on the Crude Oil markets today. As we move higher we test the highs of the trigger-zone
88.00 and we look for more clues. Will the
price keep going up to the 90.50, 92.53 and possibly 94.80 area? Or will the sellers grab hold, the buyers
take profit and price reverse off these highs?
What is market personality telling us on Crude Oil? We don’t know, so let’s read the tape, watch
the speed around the highs and make an educated decision.
We can see Crude Oil trading at the highs of the short termsideways range, and we need to be aware that this location 87.35 is going to be
a major level of resistance. If price
moves higher we look for the fake-out breakout first and then on buying
strength we use a wave-pattern Long to enter with the buyers. On the flip side, if the resistance holds we
need to sell these highs, and remember the PHOD will be a price magnet back to
82.42.
