Day Trading Morning Prep Gold, Crude Oil, Dollar Index, Euro, E-mini Russell Futures

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Let’s begin our morning routine with the economic news for today’s trading session.

8:20 Gold & Currencies OPEN

8:30 Jobless Claims

8:30 Productivity & Costs

9:00 Crude Oil OPEN

9:30 US Market OPEN

10:00 ISM Non-Manufacturing Index

10:30 E-mini Reversal

11:00 Transition into Lunch

11:30 European Close / Live Webinar in our Trade Room

Looking at today’s news we didnt hear much overnight regarding the supply of crude oil, so we dont have the CL moving like earlier this week from that.

830am news will be important to set the ‘tone’ for the morning ahead of 930am OPEN, and we will look forward to a possible early close of the morning session with a big news event on friday morning @ 830am EST Non Farm Payrolls.

Lets take a look at the markets we’re watching today…

Dollar Index Futures

The dollar index continues to chop down to new lows, but having a hard time doing so without lots of indecision.

This lack of direction on the dollar has led to gold and the euro being rather choppy this week as well, so we want to remember the Dollar Index Futures Correlation when using it for day trading.

Crude Oil Futures

Lots of information to ‘digest’ on the crude oil 34range chart this morning. With not much ‘fundamental’ news out of the Middle East this morning (for now at least) we rely on technicals to be our guide as we get to know its personality this morning.

I notice a few important things on the CL 34range chart this morning…

Massive Price Channel in Pink trend lines
Price Wedge in Blue Trend Lines
Major Support Levels below
Previous Highs and Lows

We just came off the highs of the bigger price channel in Pink trend lines. You can see the 2-step short Price reversal patternwhich triggered just after midnight below 101.71.

We want to sell the highs of the channel, so that was a great opportunity to do so. Now lets focus on the short term Wedge Pattern in blue trend lines.

Buy the lows and sell the highs of the price wedge, and right now this wedge is quite narrow, so the higher likelihood will be for the wedge to break, so lets be patient.

I can see some major levels of support that we can use as buying opportunities as price comes down off these recent highs.

Remember the simple rule: as price falls im buying first, selling second. So im looking to buy the ‘bounce’ off support, and then

If price breaks new lows I will Sell a Retracement at resistance.

Buying at 100.37, 99.53, 99.21, and all the way down around 96.37

We also have to point out the PHOD and PLOD. We are trading INSIDE the range from Wednesday so we have to assume the PHOD and PLOD are the most attractive levels on this chart.

I will look to sell the PHOD and buy the PLOD until those levels are broken and we will then use the wave pattern to Buy a Pullback at support if price makes new highs, etc.

We can see the gold futures trading off the highs from wednesday, and now we see three things to consider:

Major Price channel in Green Trend lines
Minor price wedge in blue trend lines
Sideways range below us in the white box

We cant sell the highs on the price channel, that’s behind us for today. We’re in the middle of the channel, so we need to wait to test the lows/support, or back up to test the highs/resistance.

its important we avoid the MIDDLE of the range and focus on the highs and lows.

Looking to buy at support at the lows of the channel around 1418.3

The more immediate issue is the short term wedge pattern in blue trend lines. The narrow the wedge, the more difficult to get into a high percentage trade. We want sell the highs and buy the lows of the wedge, so look for support and resistance to accomplish that.

Sell 1427.5 highs of the wedge, and buy the lows of the wedge around 1422.0. Again, beware as the wedge becomes more narrow as the day develops.

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Gold Futures