August 30, 2011
- in Uncategorized by schooloftrade
Crude Oil fails, Gold stable at big round numbers as traders prep for Consumer Confidence Numbers
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The James’ Report: Professional Resources for Professional Traders
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– Crude Oil still trading below 90.00 on fears of too much supply and not enough demand
– Seasonal impact on Gold Futures may be another thing to watch as people take profit
– S&P lowered its 2011 and 2012 GDP outlook for the Euro zone. It noted that slow growth risked a double-dip recession in the region
– European equity indices opened the session higher, tracking yesterday’s gains in US equities. Banks in Europe opened broadly higher.
– Since 1948 every time the fourth quarter change in US real GDP has fallen below 2%, the economy has entered recession
– The financial press reported that some believe that ECB’s Trichet signaled that the central bank might pause rate hikes. Trichet said that the risks to the medium-term outlook for price developments are under study. In his testimony to parliament, Trichet did not use the word ‘vigilant’ when talking about inflation. Some analysts expect that the ECB will leave rates unchanged until the end of next year.
– PIMCO’s Bill Gross admitted that he made ill-timed bets against the Treasury market
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Today’s Economic News:
Looking at the news this morning we have another summer trading day, in the last 2 weeks of the summer so we focus on staying patient waiting for the best times to begin trading this morning, while keeping an eye on the clock so we do not trade too late in the morning.
We begin the day with 900am Case-Schiller Home Price Index, then followed by the US Open at 930am. Consumer Confidence will be the biggest news of the morning at 1000am, and then we will see volume slow down around 1045am before lunch settles in early. We have 200pm FOMC Meeting Minutes this afternoon which will be one more reason why volume will be drying up early.
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Looking at the Charts:
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We get some easy clues on crude oil:
Bull Price Channel on the 89range chart tells us to be buying pullbacks with new higher highs and buying at major levels of support as price falls.
Price Wedge tells us to buy the lows and sell the highs, avoiding the middle and be looking for the fake-out breakouts.
Inside day tells me a lot of the same as a wedge, sell the PHOD, buy the PLOD and trade inside the range we are in currently.
If price breaks above the PHOD we then start buying pullbacks and if price breaks below the PLOD we begin selling retracements.
Crude Oil is falling this morning, so we want to beware the middle of the range, and look to sell retracements with new lower lows, taking profit at the support levels below us.
Keep an eye on buying opportunities as price falls considering the bull price channel we have on the 89range chart.
We got some easy clues on gold futures this morning:
Price Wedge tells me to sell the highs and buy the lows of the wedge.
Inside Day just turned to an outside day, and we can use this as our guide.
If we fail at the highs and fall below the PHOD this is a strong clue to start selling these highs.
If we keep moving higher above the PHOD this is another strong clue that buyers are in control and we look to buy pullbacks, however, taking profit at the next level of overhead resistance.
As we rise im selling at resistance overhead first, and then buying pullbacks with new higher highs.
As price falls im buying at support first, and then with new lower lows I can sell retracements.
We have plenty of resistance levels overhead that will be excellent places to sell with a 2-step pattern short.
We have plenty of support levels below us which we can use to buy with a 2step pattern long.
We need to avoid the middle of the range and remember the big round number 1800 and the BMT 1791 will be excellent targets for our short trades.
Euro Futures are giving us easy clues this morning:
We know the market personality on the Euro has been sideways and range-bound, so we know how to profit from this structure.
Price Wedge tells me to sell the highs and buy the lows, avoiding the middle.
Sideways Range gives me support levels to buy if price drops, and resistance levels to sell if price rises.
The biggest challenge today will be staying patient and avoiding the middle, waiting to buy the lows and sell the highs.
Russell up next…
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