December 3, 2010
- in Uncategorized by schooloftrade
Day Trading Non Farm Payroll News @ 830am Morning Prep Crude Oil, Gold, Euro
Morning Prep for 12-03-2010
Friday Non-Farm Payrolls @ 830am EST have these markets trading sideways
- 8:30 Non Farm Payrolls
- 10:00 Non-ISM Manufacturing
- 11:00 Beginner’s Training in our Live Trade Room
We saw sluggish price action on Thursday ahead of today’s jobs report, and this morning not much has changed since we closed up our charts last night.
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We have gold futures trading at the top of a wedge price pattern, and as you can see we have developed into a sideways range at these highs.
We always look to sell the highs of a wedge pattern or a price channel, so we’re keeping an eye on the news this morning and the short below 1381.3
I would expect the news this morning to give us a good opportunity to profit on the gold, so lets prepare for both directions:
If the gold rises…
Im looking for gold to push through 1395.0 and will either be taking the breakout above 1395.0 or waiting to buy the pullback at 1395.0 once its already broken new highs.
If the gold falls…
Im looking at multiple levels of support from 1385.5 down to 1381.3 so be careful trying to play around these levels. Chances are good that the market will bounce around in there for a while.
I’m looking for my short below 85.5 and then again below 81.3, always keeping an eye on the next level of support below me to make sure we have enough room for the short trade to work.
I will cover this short at the trend line support above 1372.0
Lets also remember that if price gets pushed below 1385.5 it will also try to enter back into the sideways range above it if the sellers are weak.
Im going to be reading the tape to keep an eye on the sellers leaving the market when we break new lows, looking for the failure, giving me a buying opportunity back up above 1385.5 if we fail to drop.
As always, im looking for the breakouts of this sideways trading range, but im also keep an eye out for the FAILURE of these breakouts to enter back into the sideways range.
Crude Oil Futures
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We can see crude oil futures are also sitting on top of their trading ranges and looking for some direction from the news at 830am today.
Anytime we are at the highs of a price channel ) we have a few options:
I want to sell the highs as my first priority, and im always watching for failures.
So first lets look short below 87.75 (trigger line on this chart) and looking to cover this short trade at ½ off at 87.00 and the final ½ off at 85.00
The short trade is the ideal, but lets think about a possible failure. The news comes out and the price drops below 88.00, but then we see the sellers lose momentum..
I’m looking to buy the closest level of support looking for a price reversal back to the upside if I read the tape and I see the sellers leaving the market after the initial drop.
Buying support at 87.48, 87.00 and 86.27 are all likely possible entry levels when this price comes down from the news.
Buying the support will be an excellent way to take profit out of this bullish market.
Price may also rise after the news, which means we need to be prepared to be a buyer.
Buying the highs of a price channel can be tricky, in fact, the best way is to buy a pullback. Rather than trying to predict when the market will break new highs, we can wait for the new highs to be made, then wait patiently for the price to pullback, and we can buy at the next level of support.
So look for price to break above 88.24, 88.65, and even 89.00 is a possible location for us to be buying at support on the way up if this price rises.
Keep an eye on the longer term momentum as you are buying on the way up, looking for the signs of a price reversal and the price coming back down
- – Slowing speed
- – Momentum curls
- – Big money sellers on the tape at the new highs
We will be reading the tape and watching the speed of the market to make educated decisions on this today.
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The Euro continues to trading inside of this massive bearish price channel.
With the dollar trending up, the Euro is trending down. And we have to consider the different options we have when trading in a price channel.
The short side will be the higher probability trades in the long run, so look for areas of overhead resistance to be a seller.
It looks like the euro will continue to retrace off the lows of the price channel, so we can sell shot at 1.3500, 1.3400, 1.3300, and even as close as 1.3250.
Im going to use additional levels of support as my profit targets.
We want to take profit on the LOWS of the channel, so look to hold these shorts down to the lows of the channel around 1.3100
If you’re looking for short term profits on thie euro trade, look to be a buyer at support as this price bounces off the lows of this price channel.
Im looking to take profit all the way up to 1.3500, and buying my way up from 1.3200, 1.3300, and 1.3400.
I want to buy the lows, so stay away from buying in the middle of this price channel, so the buying opportunities get fewer as the price rises above 1.3300
For the most part, we can see the euro off the lows, off the highs and in the middle of the range, so lets be patient to see what the 830am news says and go from there.
If the price rises off the news im going to be buying support. If price falls off the news im going to be selling at resistance.
