Dollar looks confused trading in previous range as Crude Oil tumbles on demand concerns

The US Dollar Index fell yesterday afternoon into this morning’s trading session, pulling back into its trading range from late last week.
Monday morning all signs pointed to ‘liftoff’ for the US Dollar Index (DX) but it appears that the ECB’s Trichet said something in his speech yesterday to calm everyone’s nerves…or was this the last final sigh of relief before Greece finally defaults?
The concerns over the debt crisis in Greece/EU is under fire this week and that will be a lot of the dollar movement we see.  I will be watching the 13range (see below) on the dollar all morning today looking for clues using the Dollar Index Correlation.
Crude Oil Futures are sharply lower than yesterday’s open after its big drop in the early afternoon on Monday’s news out of the US and China saying the demand is dropping sharply.
Gold Futures are also beginning to take center stage this morning after some very slow days in the month of June.  Investors are concerned about inflation, and Gold may move higher this week on recent news about traders views on the risks of inflation.  When we print money, that money becomes less valuable, and people seek shelter from that falling value in GOLD.  We will discuss more of this in today’s webinar.
Looking forward at today’s news, we have a busy morning ahead of us.
We begin at 830am est today with three major news events, which will cover all the markets we trade.  We start with Vehicle Sales out of Canada (CAD News), and then we have Producer Price Index (PPI), and Retail Sales out of the US.
The CAD News will mostly affect crude oil and the CAD Futures, and then US News will have a big impact on INFLATION which means we will look for moves on Gold Futures.  Retail sales are a great gauge of the economy growth, so that will affect the US Dollar Index.  All three of these news events will have value today at 830am and we will be looking for clues by reading tape.
Later this morning we have the US Open at 930am, and US news at 10:00am for Business Inventories.  The manufacturing sector in this country has been slowing down for weeks, and this will be another clue to let us ‘look under the hood’ and see what’s really going on with this so-called recovery of ours.
And finally today we will hear from our Fed Chairman, Ben ‘the’ Bernanke. Speaking about the Debt Ceiling in Washington, this will certainly be on the minds of traders across the globe, and because of this we do NOT expect a Golden Lunch.  I hope I’m wrong on this assumption, we could use some good price action after a slow day on Monday, but typically traders will exit the pit early today as they wait to hear what he says at 2:30pm today.  You can find the rest of his speaking schedule here.

DX 89Range SchoolOfTrade.com

DX 13Range SchoolOfTrade.com

My plan using the US Dollar Index today:

–        If we go sideways inside this range we can trade in any direction we see a strong pattern.  There is no bias (no strong correlation) when the dollar is flat.  We can still trade these markets with sideways market on the dollar, but it needs to be moving.

–        If the dollar makes new lower lows we will be looking to buy at support and buy with pullbacks on the markets we trade most.

–        If the dollar makes new higher highs we will sell at resistance and sell retracement with new lower lows on the markets we trade most.

We want the CUP!!!!

    schooloftrade

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    Anonymous - June 14, 2011 Reply

    My plan of attack on Crude Oil this morning using the 89range chart will be quite simple:
    If price rises im selling the highs of the range(s) at 97.80, 99.00.
    If price makes new highs from there im avoiding the big round number and the BMT around 100.00.
    As price rises im selling at resistance first, and then buying pullbacks with new higher highs.
    I will not buy at the highs.
    If price falls im buying at support first and then selling retracements with new lower lows.
    I will buy support and the range lows at 96.55, 96.15
    I will also look to buy the lows of the wedge, the channel, and the ranges.
    As price keeps dropping I will be looking to sell retracements.
    I do not sell the lows.

    Anonymous - June 14, 2011 Reply

    Our plan of attack with this information on crude oil:
    – Buy the lows and sell the highs b/c of the inside day
    – Look for buying at support, and then buying pullbacks using this bullish trend and the magnets overhead.
    – Don’t get ‘married’ to the long side, keep the eyes open b/c this week is OPEX and Quad Witching and anything can happen, especially with the dollar trading possibly sideways this morning.

    Anonymous - June 14, 2011 Reply

    Our plan on crude oil after 1030am:
    – Inside day, so sell the highs and buy the lows, avoid the fake-out breakout.
    – If price rises im selling 98.25 resistance, and then looking to buy a pullback above that level.
    – Take profit, or look to sell at 98.50, then look to buy pullbacks above that level as well.
    – I will be watching momentum VERY closely today as we make new higher highs.
    – If price drops im selling the highs of the price channel below 97.84 (21r trigger line)
    – We get a really big drop below 97.70 (34r trigger line) so look for the highest % trade short below that level.
    – Targets on the way down will be 97.40, 97.13, and then 97.00 is the lows of the channel.

    Anonymous - June 14, 2011 Reply

    Review Gold Futures:
    89range chart is the most important price levels so we start there first.
    We see the following:
    – Price Wedge, we are near the lows
    – Sideways Range(s) and we’re near the highs
    – BMT is below us, 1514.6, at the lows of both the ranges and the wedge.
    – Transitional area is below us. (trigger zone)
    – In the middle of the major sideways range
    We can see a macro view with the 89range and it tells us that TODAY we in the middle of the major range, which means buyers and sellers will be competing over WHO HAS CONTROL.
    This will lead to sloppy price action, lack of ‘follow through’ and no easy personality to pick up on.
    The Gold 34Range chart shows us:
    Inside day = buy the lows, sell the highs, avoid the fake-out breakout.
    Bear Price Channel, sell the highs as high %
    Sideways Range, sell the highs at 24.9 AND BUY THE LOWS 14.5
    Avoid the OPEN at 21.0 and avoid the middle of the ranges.

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