August 4, 2011

in Uncategorized by schooloftrade

Don’t let the news fool you, the numbers are juiced! 300 ticks on Crude Oil

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Summertime markets mean less volume early in the morning and less volume late in the morning. We find our best trades occur from 930-1100am est during the summer.

We’re waiting for jobless claims to come out at 830am today…

Initial jobless claims for the July 23 week dropped a very sharp 24,000 to 398,000 for the first sub-400,000 reading since early April. In a partial offset, the prior week was revised 4,000 higher to 422,000. The four-week average of 413,750 is down a steep 8,500 in the week for a nearly 15,000 improvement from the month-ago reading. One factor that clouds the latest report and movement ahead is uncertainty about retooling in the auto sector. During summer retooling, timing is always hard to gauge and uncertainty is even greater this year due to ongoing production cutbacks tied to shortages of parts from Japan. Minnesota, where the government remained shut down for most of the week was also a special factor, reflecting the likelihood that the state was hindered in processing claims.

830am est

Jobless Claims come out as expected, and the markets are still trying to find some personality this morning so we can get involved.

Crude Oil:

Crude Oil futures continue to tumble this morning on lack of demand across the globe as manufacturing sectors slow, unemployment rates rise, and consumer spending flattens.

We have the horseshoe pattern on the 89rang chart which clearly shows price falling to major support 89.92 which is the same price level we began rising from less than 10 days ago. The key today on crude oil will be to use the bear price channel as our guide, selling retracements with new lower lows, and selling at resistance if price rises up to the channel highs or any levels of resistance overhead. With major support levels below and resistance overhead we will keep an eye on these major levels as profit targets for our short trades and levels to enter short if price rises. We will be looking to buy above the blue trend lines for the horseshow pattern, so keep an eye on strength on the buy side for long trades above 91.27, 93.11, 93.86 and 95.68 this morning, however the higher percentage trades will be to the short side.

My plan on crude oil today:

· Outside day, below the PLOD, so im selling retracements with new lows.

· If we go back above the PLOD it turns INSIDE DAY and then we trade it much differently, buying above the PLOD and now the buyers back in charge.

· The bear channel tells me to sell retracements with new lows as well, and im going to sell at the resistance levels overhead.

Gold:

Gold Futures are sloppy and sideways after pushing new highs when major money managers were heard telling clients to buy gold. (are they serious? At the highs? Yikes.) Day traders know better than to buy these highs today, so we will wait for major pullbacks to key support levels for buying opportunities, its much more effective at achieving a better entry price and more profit per trade.

You can see we had one buying opportunity overnight on the 89range chart posted below, and we will be staying away from the highs today again on gold, looking to buy pullbacks or buy at support levels of 61.9, 59.1, 54.3, 34.6, 18.8, etc on the way down. We also know that selling the highs will be an effective trading strategy, however its been very sloppy at the highs and we dont see the highs being the most safe way to trade our risk capital at this time, so beware the price action stinks at those highs, so lets be patient…we will get our time to short this commodity in the near future and all this patience will pay off.

900am est

We have new highs on gold and the pullback looks too sloppy to be confident trading so we look to sell below the PHOD at 75.9 selling the buyers failure.

We are NOT looking to buy at the highs, so beware on gold.

Crude Oil gave us 40 ticks of profit buying the channel lows, and then tried buying at the major 89range support 91.72 and above the PLOD and the market didn’t go higher, scratching me out.

We’re assuming that if we break the PLOD and rise above 91.60 we have a big wide open space to 92.50, so 100 ticks of room to rise.

We’re looking for ways to get into the long trade above 91.60 (trigger line on my 55range chart)

1035am est

We have made over 250 ticks of profit hitting our goals for the fast track and making money for everyone guests and members alike.

Now we’re trading at the lows of the major bear channel and we have very concerning price action on our crude oil charts.

We see hammer candlesticks (big wicks, small bodies) and these give us easy clues to beware the market is slowing down, becoming more risky to trade.

Why is this?

· No more news today

· Summertime day, so no late morning volume

· Major news tomorrow @ 830am

We assume traders are leaving early today b/c of the news and the nice warm weather outside their offices!

1100am est

We have the personality changing very quickly after 11am today

We don’t have any more news and we expect traders will be getting out of the office early as the summertime afternoon calls!

We have major news @ 830am tomorrow and big money will be sitting on hands until afterwards.

Our next trade on crude will be short from 90.50-90.70 area as we test the highs of the bear channel (resistance)

Don’t let the news fool you, the numbers are juiced! 300 ticks on Crude Oil

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