February 4, 2011
- in Uncategorized by schooloftrade
Day Trading Morning Prep Gold, Crude Oil, Dollar Index, Euro, E-mini Russell Futures
Let’s begin our morning routine with the economic news for today’s trading session.
8:20 Gold & Currencies OPEN
8:30 NonFarm Payrolls
9:00 Crude Oil OPEN
9:30 US Market OPEN
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
We expect today’s 830am news to be a very important event. This is the biggest employment report of the month, and may be the most anticipated news report overall by many day traders.
As always, the biggest reaction to watch will be the dollar. Look for clues from the DX 03-11 this morning after the news is released for trading opportunities on gold, crude oil, euro and russell.
Set your alarm 5mins before the news and then we will wait to see the personality afterwards. One thing of caution…this news almost always results in a VERY fast market which can be tough to trade up to 15mins after, so be patient and wait for the best opportunity to trade in a market that is not moving too quickly to get involved.
Its a friday, so expect to see the day come to an early close, especially if the news is flat.
lets take a look at our charts this morning…
The dollar made a strong move off the lows of the trading range yesturday. Today we find the dollar back at the highs of the price wedge.
This is always expected when a market moves out of a price wedge. Buy the lows and sell the highs is our motto, and you can see how the dollar moved from low to high of the price wedge.
Now we see the dollar trading flat from 77.995 down to 77.745.
Im watching the dollar for three things:
1. price rises
2. price falls
3. price trades sideways
If you recall the Dollar Index Futures Correlation we want to look at the dollar for trading direction on other markets, so look for the dollar to give me clues based on where we go from here.
Example: Gold is at new highs this morning, if the dollar moves down expect to buy a pullback on gold into new highs. if the dollar rises, im looking to sell the highs on gold with a price reversal patterns
Crude Oil Futures
Crude Oil is trading in the middle of a few price ranges, so im looking for a little more movement up or down for the best trading opportunities.
Notice the two price channels in yellow and pink trend lines.
Im at the lows of the larger channel in yellow, so looking for buying opportunities, and I can see a nice 2step long above 91.20 on this 34range chart.
Im in the middle of the pink trend line channel, so we need to keep an eye on the highs and lows of this channel as well.
One thing that is concerning is the price wedge forming from both of these channels intercepting betwen 91.00 and 91.40.
Hopefully the news will clear us out of this narrowing price wedge, but if it cant clear below 90.36 or above 91.40 we may have to really be patient for this price to move into a ‘wide open space’ on this chart.
Look to buy 90.00 support, buying 89.00 as support, selling highs of 91.60, 91.92, 9.245 as examples of levels around this price range.
Gold is in a very good position to react well to this news this morning.
We can see a sideways trading range and a price channel to work with.
Notice the range from 1356.6 up to 1370.9 and then down from 1348.1 to 1325.3. We have plenty of open spaces above and below this narrow range we’re trading in at the moment, but wait for news to push this price around and we can buy up to 1400, or sell down to 1300.0
Remember the simple rules when it comes to trading ANYTHING. Buy at support and sell at resistance.
Im always trying to keep it simple.
If price breaks new highs I will Buy a Pullback at support
If price breaks new lows I will Sell a Retracement at resistance
Im looking to buy 1325.3 around the trend lines as support, sell the highs at 1356.6, 1348.1, 1370.9 and 1400 for example.
Euro currency futures are at the lows of the price channel. Depending on the dollar’s reaction to the news the euro will either rise up giving us the chance to buy the lows of the channel and hold that position all the way to the highs of the channel.
If price drops, im looking to buy at support on the way down, looking for major support around the next big round number.
E-mini Russell Futures
Sell the highs of the wedge pattern or look to buy a pullback at new highs on the mini russell
