February 4, 2011
- in Uncategorized by schooloftrade
Day Trading NonFarm Payrolls on Gold and Crude Oil Futures Dollar Correlation
815am EST
– The dollar index is trading at the highs of the price wedge, and trading sideways from 77.995 down to 77.745
– We need to remember the rules of trading a wedge pattern, dont get fooled by the fake-out breakout.
– We aren’t going to trade the dollar, this is simply used as a correlation tool.
– Check the vital signs of the dollar
– The speed of the dollar is very slow, the pace of tape indicator confirms it, but this can change, lets watch it AFTER the news and compare.
– This is where the early morning personality of the dollar can be compared later this morning for an effective way of determining market sentiment.
– The dollar average true range continues to drop with lower lows, showing an overall narrowing in price action
– Remember the news @ 830am can change ALL OF THIS, in fact the narrowing price action may be solely due to the news this morning.
825am est
– The crude oil market is a spot where lots of things can happen.
– We want to sell the overhead resistance as price rises into the highs of the short term price channel.
– If we break new highs with the 830am news, we need to be careful not to buy the highs, but to wait for a pullback and buy the pullback.
– Im looking to sell the highs first b/c of this bearish price channel
– 91.60 is the area where this bearish channel gets broken and the buyers take over, so above 91.60 we start buying support first, and then selling 2nd.
– The gold market can go in either direction fairly easily
– We can see lots of open space up to 1370.9 and all the way down to 1325.3
– Looking at the narrow trading range from 1348.1 up to 1356.6 it appears the big run up from yesterday has the market now sitting sideways waiting for some more direction.
900am est
– We saw very busy moves after the 830am news
– Fast track traders did very well selling the move down off the highs and then buying the new lows with a price reversal pattern
930am est
– we’ve made some great money this morning on quite a few trades after the 830am news
– we’re watching the markets now at the open and we see the gold market still trading in the same sideways range as it was before the news
– sell the highs of 1356.6, 1354.0
– buy the lows of 1346.5, and 1342.5 if we keep dropping.
