Dollar Index helps us day trade Crude Oil and Gold Futures with ease

825am est

– We begin our day looking at the dollar index futures trying to get a clue as for where the market is headed today

– We noticed the following

o Inside day
o Short-term downtrend
o Very narrow trading range
o Downside and upside potential (go either way)

– This tells me to use extra caution today. An inside day with narrow trading ranges, and we also confirmed lower average true range in gold and crude oil futures, which confirms our concerns.

830am est

– No news @ 830am est today, next alarm is at 915am est for the US Open

– We’re looking at crude oil futures and we see the following:

o Trading in the middle of the bullish channel (either short or long)

o Trading just below the sideways range from above us, and we define a new sideways range below this trading range.

o We are trading sideways from 79.84 up to 81.28 and we will trade inside this range selling the highs and buying the lows until we successfully breakout of this trading range.

900am est

– Gold futures are down from the all-time highs and trading in a very narrow sideways range

– At the lows of the broad range, so we look best to the long side above 1347.4

– We have a lot of immediate support around the lows on gold, but if wed can break below 1324.5 we have lots of room to drop, so be patient for all the swing traders and people looking for longer term positions.

1115am est

– We’ve had an incredible day in the room today, everyone making money

– Now we see the crude oil futures are trading at the highs of the day with trend lines overhead making resistance for a possible long trade.

– The long side will be higher risk structurally, but looking at the dollar with the downside potential we need to keep our eyes open for a break of those trend lines and a long entry going with the fundamental move on the dollar.

– Our best option (assuming the dollar doesn’t drop) is to look short to sell the highs

o Sell below 81.65 with profit targets of 50, 35, soft 10, and hard trend line as final target going down

o To buy the breakout we need entry above 82.10, but with the trend line overhead im looking around 82.15 for the entry

 Profit targets will be 30, 70, and a final hard target at the highs of the channel and the big round number of 83.00