December 7, 2010
- in Uncategorized by schooloftrade
day trading morning prep crude oil, gold, euro and russell futures
Day trading Morning Prep 12-07-10
Let’s begin our day by checking the news for the day ahead:
- 10:00 US Dec IBD/TIPP Economic Optimism
11:30 US Treasury’s 4-week bill auction
13:00 US Treasury’s 3-yr note auction
15:00 US Oct Consumer Credit1
16:30 API Crude Oil/Gasoline/Distillate Inventories
With our news identified I will set my alarm clock 5 minutes before the news to make sure I’m prepared for the news release.
Now lets check the dollar index futures
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The dollar index tried to jump back up into the bearish price channel yesterday, but got pushed back down to the lows from the trend line support late Friday afternoon last week.
We can see the dollar now sitting inside the wedge pattern, which tells us to expect narrow price action this morning unless we can break this narrow wedge.
Notice the dollar may end up back up into the bearish price channel, it will act like a price magnet, drawing price back up into that channel.
The Average true range at the open on the dollar is weak, narrow, and the speed of the tape is slow right now, so not much to be trading this early in the morning session, but time will tell where the day goes from here.
Watch the speed on the dollar, it will tell you when its safe to be trading later this morning.
Gold Futures
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Gold futures are trading at the top of the price channel and back at all-time highs
– It can be tricky trading the highs like this, so be careful not to get caught on the wrong side of this market
– Best way to trade the highs is to buy pullbacks, so look for the wave pattern when trading at the daily highs
– We also want to sell the highs, so look for 2-step reversal patterns off the highs or any level of resistance.
– The dollar index will be something to watch today considering gold is back at the highs and we have tax cut news expected out sometime today
Crude Oil Futures
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Crude oil back at the highs again, and once again we have a few specific options for this market
– Sell the highs of the price channel, looking for a 2-step reversal pattern at levels of resistance
– Stay away from buying the breakouts into the new highs, and wait patiently for a buying
opportunity using a pullback
opportunity using a pullback
– Correlated to the dollar, so keep an eye on the DX to see where the crude oil price is likely to move in the near future.
Euro Futures
The euro is back at the highs of the price channel.
– We bought the lows of the channel last Monday, and took profit at the highs of the channel like we always do.
– Stay away from buying the highs unless the news drops the dollar today and the euro has no choice but to pop
– I want to sell the highs of the price channel, so I looking for a 2-step reversal pattern
– I’m looking for a breaker short pattern, something to take us back down to the lows of the same price channel.
– Keep an eye on the BLUE bullish price channel (short term) and you can see support 3253 so look to buy at support with a day trading pattern (short term)
Mighty E-Mini Russell
The Russell looks similar to the rest of our markets, pushing new highs, possibly already expecting to see the dollar drop on bad news today
– I want to sell the highs on the Russell futures
– Looking for a price reversal (2-step) at levels of overhead resistance
– If the dollar is dropping today I will have no choice to be a buyer, and to do that I want to avoid trying to predict the breakouts, and take the easier trade buying the pullback.
