January 31, 2011
- in Uncategorized by schooloftrade
Buy Pullbacks and sell at resistance on crude oil and gold futures
800am EST
We have the gold futures in a strong bearish price channel, and we can see at the most recent price action we see a narrowing wedge.
So price are dropping with the channel, and we see consolidation with the price wedge.
I want to sell the highs and buy the lows of the channel AND the price wedge, and also look to avoid the middle.
It appears the best entry would be to sell the highs of the wedge and the channel around 1339.5
The lows of the channel around 1310 will be excellent buying opportunities, or if we sell the highs this will be an excellent spot to take profit.
1325.9 level is right in the middle and we can see that this will be likely a difficult area.
Look to take profit in the middle around 1325.9, but entries long or short may be more challenging (the middle)
You can also see a nice 34-range wave short pattern setting up, with momentum overbought, and getting into position.
Look for the short first this morning, and watch the speed and the average true range if the dollar doesn’t get moving.
825am est
– The dollar index trading in a narrow wedge pattern
– The average true range on the dollar shows higher lows into this morning’s price action, this is a good sign of things to come.
– We still want to see new higher highs on the dollar ATR, but this will be a good start.
– Speed of the dollar looks pretty slow for this early in the morning session, but this can change really quickly.
– Lets look for the dollar reaction after the 830am news this morning.
– If the dollar goes nowhere after 830am we know more about the market’s personality.
– If the dollar starts moving after 830am we know to begin looking for patterns and trade entries.
830am est
– We’re looking at the vital signs of the gold and crude oil futures ahead of the news this morning.
– The gold SPEED is very slow on the pace of tape indicator, we need speed to be increasing for a trade entry.
– The average true range on the gold 04-11 contract is rising off the lows, this is encouraging because rising ATR = wider ranges = wider targets = more profit.
– Crude oil average true is very similar, rising to new highs, not there yet, but looking good with higher lows from late last week.
– Speed has been decreasing since 815am this morning on the crude oil, which tells us this market may be either waiting for the 900am open of the crude pit, or the news at 945am, or possibly for the dollar to react.
840am est
– We saw no movement after the 830am news
– The dollar drops a little, but not much
– The crude oil is surprisingly sluggish even after 830am CAD news came out
– And the gold speed continues to be sluggish
– We had a few chances to sell the highs of the price ranges this morning, but the speed on a Monday morning can be a little less than desirable.
– The gold 34range chart shows us a WEAK market because it cant break support and it gets held at resistance.
– This WEAK market now tells us what to do with our trading
– Look for more confirmation
– Look for an easy level of support and resistance to take profit
– Don’t get greedy, take your money and run!
910am est
– We’re looking for more speed! Please!!
– We had 2 patterns on gold but the weak market has the gold troubled breaking new lows or moving off the lows for a price reversal.
– The crude oil market is even slower.
– We see flat trigger lines, sideways price range from 90.00 down to 89.21
– Speed is very slow, and we don’t have the dollar moving.
– The dollar is our main focus this time of the day (or when we have nothing moving)
915am est
– We took our first trade on the 13range on crude oil with a wave pattern short.
– The market broke to the downside, did not make new lows, but gave us a steep slope to our trigger line, and we saw momentum turn over with lots of big sellers so we took the trade.
– The
950am est
– We’ve taken three trades today for about 60 ticks of profit or $600usd on 4 contracts.
– We add another trend line to the 34range crude oil chart to make sure we identify the most recent price wedge.
– Buy the lows and sell the highs of the price wedge.
Wedge pattern:
1000am est
– We took another gold wave long and the price went +5 and -5 for a scratch trade.
– The gold market appears to continue its sluggish and lack of direction movement.
– We also took a trade wave short on the crude oil futures and saw very similar price action.
– We got our 2 targets filled, but then the crude oil slowed down, momentum went oversold so we tightened our stop and got bounced out for another small winner.
– Once again, we have NOT seen anything yet from the dollar, so we are expecting things to remain quiet until the dollar starts to move.
1015am est
– We are now in the DEAD ZONE, which is the time after the last news event of the morning and before the 1130am European close.
– No news = no catalyst
– European close = more volume and more opportunities.
– WE have some free time with the patterns setting up that we have to wait for
– While we wait lets check ALL my timeframes to make sure we’re ready for the market when it comes to us.
– Gold futures are looking VERY concerning on the 34 range chart.
– We draw more trend lines and we notice the price is in the middle of the range and with trend lines above and below its no wonder why this market is having trouble moving.
– Look for WIDE OPEN SPACES on the chart….thats where I want to wait for price to go to.
– I want to define where MY TRADE will be, and then wait for the price to come to me.
1035am est
– The dollar is at the lows and has momentum curled up from oversold
– We sold the highs on the crude oil with the dollar looking to rise off the lows for another winning trade.
– We’ve earned 150 ticks by 1030am this morning so its up to US to keep this money now.
– Watch the dollar now, is it rising off these lows? Or is it breaking new lows?
– Dollar rise = everything falls
– Dollar falls = everything rise
1135am est
– We waited to see the European close @ 1130am and looked for a few more patterns, but nothing to trade b/c we cant tell who is in control of the price.
– We want to sell the highs on crude oil, but we have trigger line support in the form of a wave pattern long.
– After the euro close we wrap things up with notes, questions, and prep for tomorrow.
