Looking at today’s news the story of the day is FOMC Announcement in the early afternoon. We call it ‘FED Day’ and its classified as having high volume early in the day, then lower volume settling in earlier than usual to end the morning as traders wait to see what the announcement is at 215pm this afternoon.

Our goal will be to get into early trades this morning, making sure we keep in mind that this is still OPEX/Quadruple Witching week, and we must be careful.

Listening to chatter this morning from the middle east, more talk from OPEC about not needing to raise output of Crude Oil with the current prices dropping.

We will continue to listen for clues towards supply/demand on crude oil as we always do.

Lets take a look at the charts we’re watching as this trading day develops…

Dollar Index Futures

The dollar can be seen in a bullish price channel this morning, confirming a short term long trend on the dollar as we rise off the lows of the larger sideways range.

What does this mean for us today?

We should see long term rises in the dollar as it moves toward 77.675. While the dollar is rising in this channel we look for selling opportunities on the markets we trade most.

The dollar will certainly have small pulbacks on the way up, so keep this in mind for short term buying opportunities on the markets we trade.

The range is sideways on the dollar, but look inside the range for small directional channels to make our trades more profitable today.

remember, we always need to pay close attention to the Dollar Index Futures Correlation when using the DX as your guide.

Crude Oil Futures

We heard news from OPEX this morning that current supply would be left unchanged in the near future with the current prices dropping.

It will be interesting to see how these price play out this morning with crude oil below 100.00 for the first time in a week.

Crude Oil continues to drop from the highs last week, and looking at this 34range chart we can see a few things to pay attention to:

Dollar trends up today, so looking for shorts with DX rising
Price Channel in green trend lines
Price wedge in yellow trend lines
Previous HOD/LOD is above us

Looking at this chart the first thing i notice is the bearish price channel, and we are almost at the lows of this channel.

We want to buy the lows and sell the highs, so look for buying opportunities today at 97.41, 97.00 and 96.82 for the lows of the price channel.

Also, with the dollar rising, shorts will be more effective this morning, so look to sell at resitance as price retraces off new lows on the way down.

The wedge pattern is going to be expanding today it appears. You can see we broke the trend line in blue aronud 99.00, and we just broke the trend lines around 98.00 as well, so the CL is on the move lower today.

With prices dropping, we need to beware selling the lows.

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

Lastly, lets recall where the PHOD and PLOD are right now…above us. The sellers are clearly in control considering the PLOD is about 100 ticks above us.

I will be watching the PLOD area of 98.47 all day today. Looking to buy above the level, and sell below the PLOD.

also…dont forget that the crude oil has been trading sideways during the day, so keep an eye out for this falling market to slow down and trade sideways, possibly here at the lows, we shall see what happens.

Gold Futures

Looking at the gold futures this morning we can see a definate dollar correlation and an easy set of opportunities today.

i see a few things to consider today:

dollar rising, looking for shorts
Sideways range from 1431 down to 1403
Price Channel in green trend lines
Price wedge in yellow trend lines
big round number of 1400.00

First thing i notice right away is the sideways range on gold 34range chart. You can see double bottoms around 1403.00 so I will be looking for buying opportunities if price breaks back above this level. Think of price failing to the downside, then bouncing back up into the sideways range above us.

Next my eyes focus on the price channel in green trend lines, and just like crude oil, we are nearing the lows of this channel. Im looking to buy the lows of this price channel using the 1405, 1400, and 1395 levels as support for the long entry at these lows.

We also see a very large price Wedge Pattern in yellow trend lines, we are near the lows of this as well. We may see new lows being made today, and if that is the case, we need to sell the retracement, rather then selling the lows of he day.

Look for new lows to be made first, dont sell the lows, and then look for a wave pattern short on the 13 and 21 range charts as price drops, keeping momentum in your mind when entering.

and lastly, dont forget about this big round number of 1400.00, which is at the lows of these ranges we have spoke about, so beware.

this tends to happen on OPEX week. the levels we want to hit…really arent the BEST levels, such as 100.00 on crude oil and 1400 on gold.

Trade carefully around the big round numbers today.

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