April 19, 2011
- in Uncategorized by schooloftrade
This is when I sit on my hands…but keep listening
820am est
– Reviewing gold futures this morning
– We see the same sideways range from Monday and we are off the highs slightly and looking for trading opportunities
– Bullish price channels are EVERYWHERE which confirms our assumption that rising prices are trying to push new highs but not having much luck
– We have an inside trading day, inside the range from Monday, which means we need to treat this like a sideways market, so buy the lows and sell the highs
– We can trade in any direction, but we need to follow the simple rule
– Buy at support, and sell at resistance
Our plan of attack on gold futures this morning
– Sideways market means we can trade long or short
– If prices rise im selling the highs of the day, selling the PHOD and selling the new highs as they are made
– These are the all time highs on gold, so we don’t want to buy them, we always look to sell the highest highs on any market
– If prices fall im buying support first, then selling retracements as we see new lower lows
– Im buying 1493.8 as support, buying lows of the short term channel @ 1491.0 beware around the OPEN this may be more difficult to find easy entry
– Im buying 88.2 as support, 84.0 as support and all the way down im buying the lows of the range and the PLOD at 77.8
845am est-
– We see the dollar index has dropped off the swing highs, testing the 76.000 level from Monday
– We see falling dollar which may result in rising prices today
– The key to the dollar correlation is VOLUMe, so lack of volume today will results in not so perfect correlation with the markets we trade
– We still have the dollar trying to drop, and this should result in buying pressure on crude, gold, Russell, es, etc
– Dollar shows higher lows in the ATR which is a good sign, but the sloppy atr since earlier this morning tells us these markets as a whole are lacking conviction, looking for more answers to rising or falling
930am est
– We’re having fun, making some money, learning about reading tape and what makes a trade higher and lower risk
– We saw the token print on crude oil today @ 900am when we tested the 106.00
– We knew it was the token b/c of the way the price reacted with SHARP reversal off the lower lows, and it happened FAST.
– Now we are trading inside the range from Monday and we need to make a new plan of attack
Plan our trades on crude oil:
– We’re at the lows of the wedge
– We just broke above the PLOD
– We saw the token print at 106.00 for the price reversal
– Falling dollar (big picture)
– All signs point to rising prices
– If price rises what do we do?
o Buying above the lows of the wedge
o Avoid trading around the OPEN of the day on crude @ 107.27 it will be sloppy
o Im selling first, then buying new higher highs with pullbacks
o Im selling 107.64 for a short term scalp
o Im looking to buy the lows of the wedge as the high % move, so selling 64’s may be higher risk, we’ll see where the momentum is at that point
o Im buying a pullback above 107.64
o Selling 108.00, 107.95 is the BMT so beware trading around the BMT, look to take profit and look to sell with 2step reversal
– If prices fall
o Selling below 107.27, below 107.00, below 106.62,
o Im buying first as prices fall, so buying support at 107.10, 107.00, 106.62, 106.01, 105.79
o As prices fall im buying first, then selling new lower lows with a retracement
945am est
– We see crude oil break above the wedge lows and above the PLOD for the 2nd time today
– We also see these attempts are FAILING
– We don’t really know if the price will keep rising, but right now it APPEARS this move up is coming to an end.
– Lets wait patiently and see where we go from here
1000AM EST
– The personality on this market is now much different than it was earlier this morning
– We’re trading very weak into overhead resistance
– We cant seem to make new highs or new lows
– Every time we see BIG MONEY it does NOT spark a BIG MOVE like it did earlier this morning
– Lets trust our rules, lets not end this day on a bad note trying to force trades just because its 10am
– We have a holiday today, the day after tax day and we have no more news today
– These are all reasons why this morning may end early
– Not to mention we saw a LOT of action for the last 90 mins, which leads us to think we will NOT see the Golden Lunch
1035am est
– We took our last trade on the crude oil when we broke the new HOD, buying pullback for the entry
– Now we are well aware this market is slowing down, but we DON’T KNOW if its dead for the rest of the morning
– We have three options now
o Sit on hands and wait for 1130am and see if this price action gets any better
o We can move to a demo account and keep trading through it
§ Don’t kill your confidence before we see price action later today/tomorrow
– So lets sit on our hands until 1130am so we don’t end this day on a sour note
– Lets plan ahead just in case the market starts to move for us
– Crude Oil futures
o If prices rise im selling resistance at 108.13, beware the BMT at 107.93
o If prices fall im buying at support at 107.00 but looking for entry above the PLOD of 107.10, looking for buyers above 107.11
o If we break below 107.00 sell a retracement, do not sell the lows
o If we break above 108.13 we buy a pullback on increasing speed, we don’t buy at the highs.
o Buy at support, sell at resistance
