Crude Oil Broke Support, So I Sold The Highs of Sideways Range.

Reminder that tomorrow, Friday, is Options Expiration, but this is one of the 4 times a year when we have quadruple witching. More info on the 10:30 Reversal can be found here:

http://www.sidewaysmarkets.com/2010/04/8-phases-of-e-mini-markets-we-trade

we see the market open @ 930am EST, and then the BIG money enters the market at 10:30am EST, which causes a reversal.

We begin our day looking at the dollar index, because the DX will be a good signal for the day ahead.

We notice that the trading range is much wider than yesterday, so this is a good sign for better price action than we saw on Wednesday.

The dollar is moving, and that tells us the rest of the markets should be moving today.

Compare the dollar today, to what we saw yesterday, and you can see the difference, and use this to make confident decisions moving forward.

Gold Futures are trading at the top of the channel pattern and at the all time highs.

At the highs we are always looking to sell the highs with a simple trend reversal pattern like the 2-step.

Looking at the scalper’s timeframe (4range) we can see gold trading just above the previous high of day, and when we know we are also at the highs of the channel on the slower timeframe this gives us more reason to be looking to sell below 1273.5

We can also see support at 1274 from yesterday’s High of Day, so that will be a key level of support to be aware of.

If we stay above the Prev HOD we should be looking for long entries because clearly the market participants want to hold these highs.

We will have to wait to see.

Crude oil 34 range chart (slow timeframe) shows us trading sideways at 75.00 (big round number), and we also see the market at the lows of the bullish channel.

Im looking to buy the lows above 75.54 so we have the most room above us for the trade to work.

We can also look short below 74.66 because we need to wait for clear confirmation that the market is going to stay below the channel.

Euro futures are still trending up from earlier this week. we had a hard time getting thru the big round number 1.3000, but now we appears to be in a better spot.

We are trading right in the middle of the new sideways range on the euro from 3100 down to 3034.

Im going to buy the test of the lows at 3034, sell the highs at 3100, and stay away from the middle (3065)
915am EST

– Dollar bounces off its lows of the day and trades in the middle of its range, which is causing the rest of the markets to trade sideways as well, so be cautious.

– Crude oil futures trying to hold the lows of the bullish channel, so we are waiting to see the price increase or decrease to our open areas on our chart.

– Gold coming off the highs of the channel, but sitting on the previous high of day, which is perfect for us to look for the next short opportunity.

945am EST

– The Russell shows us a great example of a fake-out breakout. (price reversal)

o Russell tried to break to the downside below its sideways trading range, and we’re looking to sell that breakout.

o We saw decreasing speed at the lows when we broke new lows
o We saw momentum oversold at the lows
o And then we saw momentum curl up from the oversold territory
o We saw speed increase as the big money BUYERS stepped back into the market

o The SPEED confirms the move. Since the speed increased when price was RISING, it confirmed the market sentiment to the LONG SIDE>

 We can’t take this trade b/c we have overhead resistance that disqualifies this pattern, however, great example of using speed to identify sentiment.