Looking at today’s economic news we see early Retail Sales @ 830am and then continuous news releases throughout the morning session. This may result in consistant stimulation of price action, and the potential for more movement in price is expected with more news events.

One thing we need to focus on will be the Crude Oil inventories at 1030am est today. Since this market directly impacts our crude oil futures market we will watch closely after 10am est to see when the personality changes, and use caution going into the news at 1030am.

Lets take a look at the market’s we’re trading today.

Crude Oil Futures

Crude Oil 89Range SchoolOfTrade.com

Open your 89range chart on the crude oil futures and you can get a good idea for what type of day we can expect. You can see how we have dropped like a rock all the way from the highs last week down to the highs of the bearish price channel. Now price has been trading sideways at this distinct trend line support.

Now that I have a better idea of whats going on with the big picture I can look closer at the specific price levels above and below me, planning my day ahead.

Crude Oil 34Range SchoolOfTrade.com

Open up your 34range chart on the Crude Oil 06-11 and you can see the following.

Green trend line = top of major bearish channel
Short term sideways range in white box
PHOD and PLOD
Price Wedge in Yellow trend lines
Bearish Price channel in dashed yellow trend lines

I know right away that our green trend line is the top of the bearish channel that we located from the 89range chart posted above. With that said, we need to use this as a red flag of caution. Price action may be flat today and trading around a trend line like this may cause trouble all morning, especially if traders are waiting for news @ 1030am. Beware of low volume and sideways ranges around a specific trend line, and this is a great example of that.

I also see the short term bearish price channel in yellow trend lines was responsible for this big drop from new highs last week, and now this channel is being broken with this short term sideways range. This tells me the market is holding at support (trading sideways) and we will look for a possible change in direction (back up) or the continuation back down to new lows (into the channel below us)

I can also see the PHOD is way above us, and the PLOD is right below us. This means today is an Inside Trading Day which means our range TODAY is inside the range from YESTURDAY or the day before. In this case the PLOD and PHOD will act like a price magnet. I will expect price to try and make it down to the PLOD and up to the PHOD.

and lastly, you will notice the think yellow trend line @ 108.00, that is the low of the price wedge we used on Tuesday to make all our profits. Look to trade above that 108.00 trend line treating it as the lows of the wedge.

With that said, here’s my plan of attack on crude oil futures.

Today we have inventories @ 1030am so I will be sitting on hands from 1015am est at the latest
Sideways range around this major trend lines means I will be using caution
Sideways range means I can either buy or sell with no real bias
If price rises im selling at resistance levels first, then if price breaks new highs I will buy pullbacks instead of buying the highs
If price falls im buying at support first, and then if price makes new lower lows I will sell retracements instead of selling the lows.
Im going to buy the PLOD below me, and I will sell the PHOD above me if we can test it

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