February 3, 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 Jobless Claims
8:30 Productivity & Costs
9:00 Crude Oil OPEN
9:30 US Market OPEN
10:00 Factory Orders
10:30 EIA Natural Gas Report
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
12:30 Ben Bernanke Speaks before Congress
Looking at the news for today we have big news @ 830 and 10am EST today, then expecting to see the markets slow down ahead of Natural Gas news @ 1030 and then very slow for Bernanke speaking at 1230pm EST. We expect a slow afternoon today with non-farm payrolls expected out friday @ 830am est.
We continue to watch volume this morning as well in the aftermath of the snow storms affecting most of the exchanges in the US this week.
Set my alarm 5 minutes before the news and then wait 5 minutes after the news for the market to find it’s direction.
Lets take a look at our charts for today…
We can see the dollar trading in a narrow sideways range just below the price wedge from late last week.
Sideways ranges on the dollar can mean 2 things:
1. expect sideways markets on other markets we trade.
2. we can trade long or short depending on the condition of the DX at specific times.
For example, a sideways dollar may rise off the lows, giving us selling opportunities on gold, euro, crude oil, etc.
However, this sideways range on the dollar MAY lead to quiet markets for us to trade, so watching speed and average true range on the DX 03-11 will be very important.
Always remember the Dollar Index Futures Correlation when using this market as your guide.
Crude Oil Futures
Crude Oil futures have been trading in a bearish price channel (pink trend lines) and late last night we broke this bearish channel and now back in the longer term bullish price channel (green trend lines).
Swing traders will look to buy these lows of the price channel, with final target at the highs of 95.00
Day traders will be using the trading range from 92.05 down to 91.32 to trade with. Buy the lows, sell the highs, and avoid the middle
Scalpers will also be able to take advantage of this crude oil market. buying at support and selling at resistance using this current trading range from 92.05 to 91.32.
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 continue to see the price on gold get more narrow this week, trading in a Wedge Pattern
drawing trend lines from the highs and the lows we can easily see the major support at 1323.6 and resistance at 1345.6 overhead.
The key to trading a wedge pattern is to buy the lows, sell the highs, and avoid the middle.
We also need to remember that if we breakout of a wedge pattern there is a very high chance the price will come back and re-enter the wedge, so look to fade the breakouts. I will always expect a fake-out breakout on the first attempt to leave the wedge.
look for support below the lows of the wedge for excellent buying opportunities, and look for resistance just above the wedge (example 1345.6) as an excellent selling location.
The gold will also be affected by the dollar index, which is also flat, and the markets waiting for NonFarm Payroll news on friday.
We see early signs of a sideways trading range on the euro 03-11 this morning. With the ECB leaving rates unchanged this morning lets keep an eye on the euro in the next hour.
If we see support hold at 3720 look for this to be a sideways range from 3820 down to 3720.
Buy at support and sell at resistance. We have a bullish price channel in the yellow trend lines, so buying support levels will be the higher percentage trade as the dollar continues to drop and the euro rises in this price channel.
we see additional support at 3661 for more buying opportunities, and remember not to trust the first breakout of a price channel, so if we see price break new lows i will be looking for buying opportunities.
buy pullbacks if we make new highs above 3820, be careful buying the highs with the dollar choppy this morning.
E-mini Russell Futures
We can see a sideways range developign on the mini russell this morning from 801.5 down to 770.8.
We want to sell the highs of this range, looking for short below 791.5 and taking profit at support trend lines on the way down.
We wave support at 791.5 so we will keep an eye on this level…if it holds we will then look to buy a pullback after we make new highs.
if we break below 791.5 we look good for the price reversal pattern triggering short to sell the highs of this trading range.
if we do make it down to the lows of the range look to take profit at 772.5 and then if we break new lows im looking to buy support at 770, 767, and 757 all the way down.
