January 28, 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 GDP
9:00 Crude Oil OPEN
9:30 US Market OPEN
9:55 Consumer Sentiment
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
*Friday’s can be hit or miss. We have many fridays with lots of action, and some fridays will be relatively quiet.
Today we have important 830am news, and based on the reaction from the market, we will watch the volume, speed, average true range from there.
We always expect an earlier close to our day on a friday, so look for us finishing up around 11am est, we will not be waiting for he european close @ 1130am most likely…we shall see. 🙂
Lets take a look at our charts…
The dollar index (DX 03-11) is still trading in this narrow Wedge Pattern.
Wedges can be excellent opportunities to define easy support and resistance, but at some point this price pattern becomes too narrow and the price action is too hard to trade.
at this point the dollar is looking very narrow ahead of the 830am news, so lets wait patiently this morning to see when this dollar breaks out of this range.
Remember the important Dollar Index Futures Correlationwhich we will use to make trading decisions today.
Crude Oil Futures
we can see crude oil moving in the same type of price pattern as the dollar. My 34range chart of the CL 03-11 shows us in a bearish price channel, but recently this morning you can see a narrowing wedge pattern developing,
this is somewhat expected ahead of the GDP news @ 830am est, so we will define this wedge, and then wait to see the reaction from the market after 830am est.
We already know that 85.00 is major support from previous trading days, so we will be looking to use this level for buying opportunities.
At this point in the morning we have both of our options open…we can buy the lows of support and sell the highs of resistance, but again, its almost pointless to speculate on the exact levels until we see the news come out.
keep it simple…buy at support and sell at resistance.
as soon as the news comes out we will try to define our support and resistance and then plan our buys and sells accordingly.
Gold futures has a little more definition of its trading range than we saw on crude oil.
We can see 2 different trading ranges within this brearish price channel so we have a few options.
– buy the support levels at the lows
– sell resistance levels at the highs
– avoid trading the middle
– buy above 1322.6 to enter back into the upper range.
– beware the area from 1319.0 up to 1322.6 which may be a tough transitional area to trade
*remember that 830am news today will likely push this chart around a little bit, so keep an eye on the trading range AFTER the news, we may need to adjust our levels of support and resistance.
The euro will be tied to the dollar index this morning so we should watch the reaction to the 830am news for clues to direction for the rest of the day on the euro.
Im going to watch the dollar reaction at 830am est to tell me which direction to trade the euro.
The euro continues in this bullish wedge pattern, notice its the opposite of the dollar’s wedge pattern. coincidence? 🙂
we see major resistance at 3756 and it appears the traders are having a hard time getting price above that level, you can see three attempts to breakout and all them were Fake-out breakout
as always im going to sell the highs of this range, so short the test of the HOD and the 3756.
If we break new highs after the news im looking to buy a pullback with a wave pattern . It will likely be tough to buy the highs, so look to wait for new highs first, and then look to get in with the pullback.
if the price drops after the news we look good below 3700. Im going to want to buy support of 3700 and 3672 but if price can push new lows we will sell retracements as soon as those new lows are seen.
in this bullish price action on the euro we need to remember that buying support as price falls will be a great option for easy trend trades.
E-mini Russell Futures
No guidance on the russell today.
