Range-Bound Markets make for easy day trades, Dollar Gave Clues
Click here to review our Automated Trading System results for this week!
Looking for clues this morning for what this day will look like… No major news today Its OPEX, so assume traders will be away from the markets if they can Gold & Currencies open with very little volume @ 820am EST The Dollar index tried to break new lows, but failed and now trading sideways in the same range from Wednesday & Thursday this week. The market TRIED to move, but failed. We also see a very clear dollar wedge pattern, and we know that DX wedges can be very challenging when they get narrow. This tells me to sell the highs, buy the lows, trade this as a range-bound market, not a breakout market. Gold Futures: 89-range chart shows a price wedge Sideways ranges from 04.5 down to 71.1 At the highs of the bear-channel Major levels of resistance above us at 04.5, 16.5, 26.8, 43.5 (swing highs above us) Major levels of support at 71.1, 62.5, 45.0 (swing lows below us) Remember…the Dollar told us to trade these as range-bound….so the resistance will be selling spots and the support will be great places to buy. BMT on the 89r is below us, so this will be a price magnet, and this would lend to the idea of selling these highs. Clue #3….BMT below us on Gold….sell the highs above us…..HINT HINT. Our plan of attack on Gold: Range-bound market Sell the highs and buy the lows Sell the wedge highs at 04.5 Buy the wedge lows at 91.1 Avoid the BMT and the OPEN Buying support at 87.2, 85.8, 84.6, 77.8 Selling resistance at 04.5, 10.3, the highs of the wedge and the range. 935am est Crude Oil drops out of its range, bad timing at 930am I cant trade it Looked to buy at support, and no buyers to confirm entry long, so we wait for confirmation Sellers come in and we trade short, but I got bounced out early and the market dropped without me. Rats! Now lets be patient for the best price action, remember this move may not last very long 955am est We got some money out of crude, but the market is very sloppy as it drops so WIDE STOPS are the only way to hold onto it. I simply can’t do that for 1 day at a time, so I need to wait for more consistency. 1030am est WOW! What a difference 30 mins makes! 900am we saw DEAD MARKETS 930am Crude Oil fell out of bed and then took off like a falling rock to the lows of the range. Now 1030am and we’re back to sloppy and slow markets We expected this, and here it is! 1030-1130 = Dead Zone so beware. Plan our Crude Oil: we expect crude oil to rise into the PLOD or even the 100.00 level end of the morning. Why? We have BMT, OPEN, and the PHOD/PLOD are all above us. We also have the Big Round number of 100 to draw price back up as well, and the big drop down at 930am on low volume should have price move back up to where it started. Its going to be hard to sit on hands if this price action does NOT improve, so beware of that. The dollar told us to expect a range-bound market and that’s what we are expecting to see, a re-test of the highs.Click here to review our Automated Trading System results for this week!
