August 8, 2011
- in Uncategorized by schooloftrade
Almost never made our goal today, use this strategy tomorrow
Monday’s during the months of July and August are expected to be a slower start for the same reasons you and I want to sleep in a little longer after a summer weekend as well. So we don’t see the early morning volume and often we wait until after 930am to take our first trade.
With the US Downgrade, crude new lows, gold new highs, we may indeed see some early Monday morning volume, so this catalyst we need to be aware of.
830am est
The US Dollar Index is making new higher highs, however, with the downgrade news this morning and with gold at new highs and crude at the lows we really dont know what to expect the near future to hold for the USD.
We need to be open for either direction on the dollar until we break new highs or new lows on the dollar.
Short term we see the US Dollar Index moving higher, so look for selling opportunities short term on gold and the correlation on crude oil is very much to be determined.
Crude and the US Dollar are trading on FEAR this morning…fear the economy is slowing down and therefore less demand for crude oil. So as the USD falls so does crude, which is the OPPOSITE of the normal correlation.
855am est
We get new lows on crude oil and sell a retracement that stalls and reverses and goes back up to the 83.00 big round number, only to then come right back down.
This tells us clearly the personality is not quite sure of whether we are sellers or buyers at these lows.
If the seller were in charge we would have re-tested the LOD, but they didn’t and therefore we consider this a failure.
Failure at the lows tell me either….expect the price to reverse and rise off the lows, or expect the price to go sideways and consolidate at these lows.
Clue #1 = personality at the lows on crude oil is a little timid.
900am est
We are using the PHOD and PLOD from Friday’s Highs and Lows do not use Sunday’s and therefore Crude Oil is inside the range from Friday.
Inside day = sell the highs and buy the lows, expect to see fake-out breakouts.
We also have a bear price channel which says selling at resistance will be the higher percentage trade.
So as price rises I’m looking to sell. And as price falls i want to buy at support first (inside day) until we make new lows and then I can sell retracements once we become an outside day.
915am est
We know crude oil has a challenging personality, undoubtedly looking for more clues for its long term direction.
955am est
We’ve been watching crude oil chop around the highs of the bear channel and the sellers just simply cant win and push price down.
We’re trading sideways and it appears the buyers are going to pull this price back up into the bull channel.
Right now we have a transitional area on crude oil:
Below the 83.58 and we assume sellers are back in charge and we want to sell.
Above 84.43 we assume buyers have taken control and we want to buy a pullback.
In the meantime, lets hang out and wait and listen to see what the markets are trying to tell us.
1000am est
We have our second loss of the morning on the fast track as the 13 and 21r wave patterns fail and price action becomes very concerning b/c this was a great looking pattern.
So we’re getting lots of clues now from the crude oil personality, and we know that the 15 tick moves are simply not happening.
“no follow-through” today on the crude oil.
1015am est
We see news chatter about the downgrade is causing ‘analysis paralysis’ across all markets as traders try to digest what’s really going on and how they can apply it to their trading.
1015am est
Sloppy and choppy, lack of direction, and no follow through, so lets plan our highest % trades this morning:
– Short below 82.58 Sunday’s Low
– Then look to buy at the 89range lows as support
1055am est
Wow we got some easy profits there!
We’ve made over 100 ticks of profit in the last hour of trading, simply by understanding this indecisive market was going to be fake-out breakouts and sloppy while it tries to move higher or lower.
So we start selling the highs and buying the lows for some easy cash.
We began our day with a lot of challenges.
– First two Fast Trades were losses, and we needed to be very careful that we didn’t give back any more money until the personality changed.
– The first few advanced method trades were small winners or small losses
Then we got price below Sunday’s Low of Day and just as we thought the price action got nice and easy for us, selling new lows with retracements and then buying at support with 2-step patterns to earn some nice profit in a very short period of time.
Going forward this morning we have FOMC Day Tomorrow so we know that late this morning will be higher risk.
We have bear channel and Inside day so selling at resistance when price rises is the higher percentage trade today.
We would like to sell retracements with new lows however the market personality suggest we should avoid selling the breakouts b/c of the sloppy, lack of follow through that comes with an INSIDE DAY.
As price falls I’m buying with oversold momentum at support, and as price rises I’m selling with overbought momentum at resistance.
