April 5, 2011
- in Uncategorized by schooloftrade
Day Trading Morning Prep Gold, Crude Oil, Dollar Index, Euro, E-mini Russell Futures
‘We are what we repeatedly do. Excellence, therefore, is not an act, but a habit’ – Aristotle
Let’s begin our morning routine with the economic news for today’s trading session.
8:20 Gold & Currencies OPEN
9:00 Crude Oil OPEN
9:30 US Market OPEN
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
2:00pm FOMC Meeting Minutes
Looking at the news this morning we can recal the low volume on monday due to Bernnake’s speach last night, and today is a little of the same.
I will expect traders to be waiting for FOMC Minutes to be released this afternoon, so with exception of the news @ 10am today we may have another day of waiting for burst of volume to look for trades.
Look for early volume in the markets this morning, and beware of slowdown around 1030am, then looking for the late-morning european close volume to come back around 1130am est. traders will be waiting for 2pm news today.
Lets take a look at the markets we’re watching this morning…
Crude Oil Futures
| CRUDE OIL 34RANGE |
Crude Oil futures have fallen off recent highs from Monday and we see a sideways market forming as we look for direction today.
Open your 34range chart on crude oil futures and you can see the following:
- Bullish Price Channel
- Sideways trading range
- PHOD / PLOD
- Transitional Area @ 106.00
The first thing I see is this strong bullish price channel, which was marked from our 89range charts very easily. Bullish price channel tells us to buy pullbacks at levels of support on the way up.
Then we see the sideways market from 108.78 down to 107.34 and we begin to put together a plan of attack. The best way to trade sideways range is to Buy the lows, sell the highs, and avoid the middle.
I also want to remember where the range from Monday is…the PHOD and PLOD will tell me this. We can see the PHOD @ 107.78 and PLOD @ 107.58, which means at this time we are INSIDE the trading range from MOnday.
‘Inside trading days’ are always considered to be higher risk, so look for price to break the highs and lows of monday’s range. furthermore, just like on monday, im always looking for buying/selling opportunities around the previous high and low of day.
And last I know we have a transition into the bearish price channel when we break the green dashed trend line at 106.30. If we break below 106.30 we should expect to see a VERY choppy set of price action and we should see sellers take hold and drag price down into the range below 106.00.
As of right now im looking to buy the support levels of 107.34, 107, 106.80, and 106.30 if price drops.
If price rises im looking to sell 108.60, 108.78, 109.00 as price rises.
Remember the simple rule:
when prices rise im selling first, then If price breaks new highs I will Buy a Pullback at support
when price fall im buying first, then If price breaks new lows I will Sell a Retracement at resistance
Gold Futures look a little confused this week, trying to find direction from the Dollar Index Futures.
Open your 34range chart and you can see the following:
- Sideways Range
- Price Wedge
- PHOD / PLOD
- Transitional Area @ 1400
The first I see is this price wedge using thick yellow trend lines. the highs of the wedge are at 1440.3 and the lows are 1413.5 roughly. The best way to trade a wedge is to buy the lows and sell the highs, making sure to avoid the middle of the range around 1427.6 which is also the Big Money Trigger Line (BMT).
I also cant help but notice the big sideways trading range from 1450 down to 1413.5, and then the more recent sideways market from 1440.3 down to 1413.5. We can use both of these ranges to trade within. Buy the lows and sell the highs of any sideways range, and avoid trading in the middle.
We also need to remember where the PHOD and PLOD are (from monday) and we see PHOD is 1440.3 and PLOD is 1430.9 which means we are INSIDE the range from monday.
Inside Trading Day is the term describe this, and it means we need to be careful. We want price to be outside of the previous day’s ranges for the best moves.
Lastly, the transitional area of 1400.0 is not only a Big round number but it will also put us below this price Wedge Pattern and will start to deal with support from the highs of the bearish price channel at 1397.2.
At this time the best plan of attack is to sell these highs of the wedge, the highs of the sideways market, and look to ride this trade all the way down to the lows around 1413.5
If price drops im buying the LOD and PLOD on the way down at support, but then selling retracements as new lows are made.
If price rises im selling the PHOD and HOD first, and then looking to buy pullback with new highs.
E-mini Russell Futures
