June 2, 2011
- in Uncategorized by schooloftrade
Back to BIG Profits Day Trading Gold and Crude Oil Futures
830am est
News at 830 comes out as expected. Jobless claims within range and productivity costs as well.
The markets should have this priced in already so we will wait for a better personality to trade.
In review of our news today we quickly remind ourselves about the 3 phases of crude oil inventories.
We also have a big concern about the late morning volume and speed, which may be slower than normal even after the 11am Crude Oil news, because of the major news on Friday morning, nonfarm payrolls.
845am est
Review the Dollar Index first this morning
89range chart shows us at the lows of the major sideways range.
(buy the lows, buy at support, so rising prices)
We also see major support on the dollar at 74.110, this will be a possible turning point on the dollar, and thus a price reversal point on the markets we trade most.
34range chart shows us in a bear price channel. We can assume the dollar will keep falling, which will make buying at support a high % trade on gold and crude oil today.
Look for wave longs, look for 2-step long off support, and look for opportunities to buy along the way up.
We also have a sideways range, which tells us that we can indeed trade both long and short today, even though the Highest % trades will be assumed to the long side (until something changes)
Review the Gold Futures market
89range chart on gold shows us a price wedge, sideways ranges, and major levels above and below us.
We are at the highs of the wedge
We have multiple sideways ranges, all below us.
We have a bull price channel, we are at the lows of this channel.
The BMT (Big money trigger) is below us as well, great price magnet, great final target, and an area we need to AVOID entering trades.
We aren’t quite there yet, but we are concerned about the narrow space between the wedge highs and the channel lows.
Buying the lows of the wedge will be a challenge if we get closer to the highs of the wedge (trend line in yellow)
34raange on GC 08-11 shows us an INSIDE TRADING DAY.
Inside days will mean we expect fake-out breakouts, and we look to trade within the range we are current in.
Buy the lows and sell the highs.
Buy at support and sell at resistance, assuming that breakouts will be short-lived and I will look for failures of those breakouts.
Flat trigger line on the 34range combined with the inside day tells us we need to wait for something to move this market around today.
My plan of attack on Gold will be:
If price rises:
– Inside day, so sell the highs of the range
– Selling first at resistance, and then buying pullbacks with new higher highs
– The dollar downtrend is another key factor of rising prices, so I will use that to confirm.
– Sell the PHOD and the highs of the wedge at 1551.6
– Sell the highs of the price channel in pink trend lines
– Sell the major resistance overhead at 1556.5 (also a great profit target if we are long)
If price falls:
– The BMT is below us so this is expected to be a price magnet
– I will avoid trading the open 1540.8 (or so)
– Buy support first, then sell retracements with new lowers lows.
– Inside day means I want to buy the lows of the trading range we are in 1536.5, 1530.5
– Buy the channel lows as support
– Buy the PLOD 1530.5
– Sell below the PLOD if sellers have taken control (reading tape at the PLOD)
– I will use the BMT 1525.4 as a final profit target, but will not be entering trades around that level.
935am est
Crude Oil still chopping around 100.00 and 101.00 waiting for more personality ahead of the news.
Gold chops around its open, right in the middle of the range its in.
Review of Crude Oil Futures
We fell from the highs of the wedge, from the highs of the channel, and the highs of the major price channel.
Now we trade sloppy around the BMT, which we consider the MIDDLE of the trading range. We like the BMT as a final profit target…NOT an entry location.
We are also trading around the GRAND DADDY of big round numbers, the 100.00 level
This is concerning, especially since we have news @ 1100am this morning where VOLUME may be the variable.
Bottom line, we need to be away from this area to be confident in our trading today.
Wait for price to rise, and then sell it as it reverses, or wait for price to fall and then buy support as it reverses back up.
Stay away from 100 and the BMT and look for price to move up or down before we start trading this morning.
Sell 101.75 target down at 100.00
Buy 99.25 or 98.45 and target back up to 100.00
1020am est
We are almost 30 minutes ahead of the news at 11am, so beware this is the start of Phase 2 of 3 on Crude Oil.
We had Gold make 1 lower low and fail, now we wait to see where Gold wants to go.
Everything still very slow at this point, lets see what happens
1100am est
Crude Oil inventories come out higher than expected, but we already knew that would be the case, so we have to wait for further confirmation.
The PLOD would be a great option to wait for right now, this will confirm sellers in control.
We just finished taking 100 ticks out of Gold as the bottom dropped out of the market, and now we sit around the BMT where we do NOT want to be trading.
Let’s look for confirmation on the direction on crude oil, and I have to wait for Gold to break away from the BMT either higher or lower.
1145am est
We just took 100 ticks from Gold and 100 ticks from crude in less than an hour.
We don’t expect the golden lunch, but we will look for the market to keep making new lower lows to complete its ‘mission’ to test the support levels we defined earlier today on our 89range chart.
Gold trading around the BMT, so beware
Crude Oil had great personality for about 35 minutes and now it slows down and we need to beware.
We know the window of opportunity may be shutting late in the morning.
We have 830am news tomorrow NonFarm Payrolls so we assume traders will be hitting the exits right about now…
