Traders prep for Manufacturing News to give some personality on a monday morning

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The James’ Report: Professional Resources for Professional Traders

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– Crude oil futures trade lower this morning on lack demand, trading outside day, below the PLOD. Looking to sell retracements with new lower lows, also looking for the failure to the downside, bringing us up into the range from Friday for a fake-out breakout (failure).

– Gold futures trading higher this morning most likely on the fear from Europe over Greece this morning. Outside day above the PHOD buying pullbacks with new higher highs, and looking for the reversal back down to the PHOD from Friday.

– Euro currency futures are trading lower as well this morning, breaking the PLOD for an outside day, but not by much. Looking to sell new lower lows with retracements, also for the reversal and re-entry back into the range from Friday for a high percentage long position.

– mini-Russell futures also trading lower this morning, just below the PLOD so this is an outside day ‘transition’ that we will look for more clues later this morning around 930am EST when the e-mini’s open their doors for the day.

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– European shares were lower in the session after Greek deficit budget figures, leaked in the press, showed that the country may miss 2011 and 2012 targets

– China’s PMI data came in slightly better than expected on the week release

– EU Crisis meeting in Luxembourg today with objective on how to increase the rescue

– Greece acknowledges they will miss deficit targets and pledges €8.8 b more in spending cuts.

– Major European Manufacturing PMI beat analyst estimates but remain at mult-year lows

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Today’s Economic News:

Day traders will be easing into another busy week this morning with no major news before 930am EST today, so expect a sloppy start, but as always our patience will pay off while we see news come later this morning.

We begin our day this morning with the US Market Open at 930am, followed by 2 major news events, Constructions Spending and ISM Manufacturing Index at 10:00am EST. We expect to see the markets take some time to show any real ‘personality’ this morning without news on a Monday, so stay patient for the best price action this morning and don’t be afraid to wait until after the 930am open to take our first trade. Monday’s are always a little slower to start, and we will expect a later volume today as well.

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Looking at the Charts:

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US Dollar Index is trading sideways this morning on a Monday without news before 930am EST.

We know the sideways dollar tells us that either direction is likely today. Without a solid short-term trend on the dollar, we can’t assume a directional bias this morning YET.

Looking for higher highs, lower lows, a steep slope to our trigger line on the 13-range chart of the dollar index. This will tell us when there’s a trend and we will then trade opposite to that trend.

Our plan of attack on crude oil futures using these three price structures:

As price rises I’m selling the PLOD as resistance first, and then with new highs above the PLOD 78.58 I will then look to buy as we re-enter into the range from Friday.

I will also sell the highs of the bear price channel as price rises, using it as resistance.

If we keep going through the highs of the bear channel I will then look to sell at the next level of resistance above the bear price channel.

If price falls I need to be very careful until we get below the 77.00 level. We have major trend line support in two different locations, as well as the lows of the bear channel, which we know will be sloppy.

I’m buying the support levels below me (trend lines, wedge lows, channel lows). I will then sell retracements below the major support of 77.11 so looking for the selling opportunities below the big round number.

I’m selling retracements down to the next level of support which is at 76.35. take profit around .40’s and look for the price reversal for the buy, or the new lower low for the retracements to sell and keep pushing it lower.

Mini-Russell futures have three simple price structures, very similar to crude oil futures this morning:

– Outside Day

– Price Wedge

– Bear Price Channel

Outside day tells me to keep selling new lower lows with retracements, at the same time if we break back above the PLOD we then look to buy the failure by the sellers.

Price Wedge tells us to expect fake-out breakouts, so I’m always looking to buy at major support as price falls, and then if we break through that support we then sell a retracement with new lower-lows.

Bear price channel tells us that sellers are in control right now, that can change, but the sell side will be the higher percentage trades until this changes.

If price rises I’m buying above the PLOD 638.1 and the lows of the price wedge. I’m then going to sell the wedge highs at the trend lines overhead and then sell the bear channel highs as the highest percentage trade on this chart.

If price keeps falling I will be careful trading short until we get price below the 628.1 major support below the lows of the bear channel.

We know its going to be hard to sell the lows of a bear channel, so beware. As price falls I’m buying at major support levels, trying to find clues to when the sellers will give up and the buyers will push it higher into the range above us (PLOD).

If we get below the 628.1 I’m selling new lower-lows with retracements.

We will continue to sell retracements with new lower-lows until we test the next major support at 620.1 at that point we will take profit, look for an entry long to bring price back up, or for new lower-lows and we then will continue to sell off with retracements.