Biggest Day of 2010; Selling Short on Gold and Crude Oil Futures Strategy

800am est

– Let’s begin our review of the markets with the dollar index futures

o Bullish price channel
o Middle of the price channel
o Bullish wedge pattern
o Selling divergence at the highs
o Flat trigger line = sideways dollar = sideways everything else
o Narrow trading range
o Speed is slow
o Average true range is ok, not too bad, but not that good either.

o ‘inside day’ which means we are inside the trading range from yesterday (Monday) and this means to expect similar price action on everything else.

– Now lets mark the highs and the lows with our ‘price alert’ indicator so we know when the market makes new highs and lows.

815am est

– Gold futures dropping this morning
– We’re seeing oversold momentum at the lows
– We’re seeing overbought momentum at the highs
– Low volume and lagging momentum are the biggest concerns for this morning’s market personality.

945am est

– The dollar continues to trade sideways back and forth up and down, which is causing the rest of these markets to trade sideways with lack of conviction.

– Once again, we see the pre-market (800-915) as the best price action of the morning

– Now after 930-1130 its been slow recently, and it looks like we may see the same thing today

– 10am brings new home sales news, so that may be a catalyst, but for now, the market is slow, sideways, and consolidated.

– The euro futures are trading sideways, so sell the highs of 1.3652 and buy the lows of 1.3572, and remember to avoid the middle of the trading range.

– We also have a nice winner on the Russell, wave short on the 21-range chart

o Momentum was perfect
o Good speed on the POT indicator
o Saw big sellers on the time and sales