February 16, 2011
- in Uncategorized by schooloftrade
Day Trading Morning Prep Gold, Crude Oil, Dollar Index, Euro, E-mini Russell Futures
‘We are what we repeatedly do. Excellence, therefore, is not an act, but a habit’ – Aristotle
Let’s begin our morning routine with the economic news for today’s trading session.
8:20 Gold & Currencies OPEN
8:30 Housing Starts
8:30 Producer Price Index
9:00 Crude Oil OPEN
9:30 US Market OPEN
10:30 Crude Oil Inventories
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
2:15 FOMC Meeting Minutes
Looking at the news this morning we have three important things to conider:
- Today is wacky wednesday, the wednesday before OPEX Friday
- Crude Oil inventories @ 1030am today
- 2:00pm FOMC Meeting Minutes
With this information we know that today will be filled with impulsive volume and inconsistant speed from Wacky Wednesday.
We also know that today has news for crude oil so we need to pay close attention to the market’s personality this morning before and after the news.
We expect to see traders waiting for the news from the FED in their meeting minutes at 2pm est today. Its tough to tell how many people will be waiting for this news, but we will look early this morning to get a feel for how the 830am news reacts and go from there.
Today has the potential to be a great day, but also the potential to be quite slow, depending on the mood of traders ahead of important news later this morning and this afternoon.
Lets look at the charts we’re watching today…
the dollar index continues to trade in a sideways range from earlier this week. a sideways market on the dollar often results in sideways ranges on other markets, so watch closely.
We only need the dollar to test the highs of the lows for our markets to give us trading opportunities, so watch the 78.730 and 78.305 levels for the best opportunities on gold, euro, crude oil, etc.
Crude Oil Futures
Crude Oil futures are trading in the narrow wedge pattern just above 84.51. We can see three things to focus our attention this morning:- Wedge pattern in yellow trend line support and pink trend line resistance
- Price Channel in pink trend lines
- Sideways range above the 86.00 level
Buy the lows, sell the highs, and avoid the middle of the wedge pattern
The price channel highs of 85.00 and 85.42 will be excellent selling points if price rises.
Looking at the support levels below, we look to buy at the lows of the channel arond 83.85 and even lower down to 83.00
if we see price jump up and test the lows of the sideways range at 86.00 we need to sell the 86.00 first as resistance but if we break new highs above 86.00
If price breaks new highsabove 86.00 I will Buy a Pullback at support
gold continues to trade in this narrow sideways range, looking very similar to the dollar.
we watch two important things on gold:
- sideways range from 1370.2 up to 1379.7
- bullish price channel in pink trend lines
We want to sell the highs and buy the lows on the sideways range, and beware trading the middle of this very narrow range.
the narrower the sideways range, the most difficult it is to trade it.
We see the price at the highs of the price channel. we want to sell the highs of the channel, and beware trying to buy new highs.
if gold makes new highs, wait for the new HOD, then buy the pullback, this will be less risky at the highs, and remember that momentum indicator should be perfect for this long trade at new highs.
The euro continues to look like the dollar and the gold this morning trading sideways in a narrow range.
four things to consider on the euro:
- sideways range from 1.3500 up to 1.3568
- bearish price channel in yellow trend lines
- BMT line is at 1.3579
- Major support at 1.3424
buy the lows, sell the highs, avoid the middle of the sideways range
furthermore for this sideways range…
If price breaks new highs I will Buy a Pullback at support
If price breaks new lows I will Sell a Retracement at resistance
We want to ideally wait to sell the highs and buy the lows of the channel, this is where the best trades will be.
right now we appear to be in the middle of the channel, and this is confirmed when we see the BMT line. This is often the middle of the range, so this will be a place to avoid trading.
Think of the BMT like point of control in market profit. its the center of the range, so expect price to be sloppy around this area.
Then dont forget we may drop and test the major support of 3424 again today, look to buy this support first, and then if we make lows below 3424 this support becomes resistance and we need to look for selling opportunities below it.
E-mini Russell Futures
