June 23, 2011
- in Uncategorized by schooloftrade
Don’t let Crude Oil fool you, buy support after the big drop
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2 reasons why we use the Fast Track:
– So my members can learn and earn while they get to know our patterns, trade management, etc.
– As a guest, you’re trying to evaluate this methodology. I want to PROVE this method works by putting my money where my mouth is.
830am est
Jobless claims rise to 429k from 414k expected, higher jobless claims = dollar bearish.
We begin our day with the dollar index and we use the 89range to see the BIG PICTURE.
The Dollar is inside a price wedge, not at the highs, or at the lows, in the middle.
We need to see the dollar at the highs/lows to get the best price action out of the markets we trade, so this is the first clue we get.
I need a day trading timeframe for my style of trading this morning, so I need a 13range to show me the SHORT TERM TREND.
We see a strong bull price channel on the dollar, we assume its in response to the FOMC announcement on Wednesday.
Our plan of attack using the dollar is simple:
– Rising prices in the dollar will mean lower prices in the markets we trade.
– Higher highs on the dollar and im looking to sell at resistance on the crude, gold, euro, etc.
– Dollar rising = I’m selling at resistance
– If the dollar stops making new highs, and trades sideways, I can then trade in both directions on the markets I trade
– If the dollar turns around, makes new lower lows, I will then buy at support on the market we trade most.
Strong bull channel on the USD gives us our 2nd clue.
850am est
Gold Futures on the 89range chart at the lows of the price wedge, the lows of the channel and trading around the BMT.
Our 34range chart on the Gold Futures shows me the following:
– We broke below the wedge, and we expect price to try and rise back up into the wedge above it.
– Outside day, we are below the PLOD, so this will act like a magnet drawing price back up, and it also tells us to keep selling retracements and buying pullbacks until we go back inside the range from Wednesday.
– BMT is overhead, so another clue for rising prices.
– Strong bearish price channel, which will be used to sell at resistance
– The rising dollar makes this an easy trade to the short side as the higher % today
900am est
We review crude oil this morning on the 89range chart first and we see the following:
– Big low volume drop to the lows of the price channel
– At the lows of the sideways range
– Below the price wedge above us
We notice that its hard to find new levels of support on the 89range, this will also be the same for other traders, so expect the most obvious levels to be used:
– Previous swing lows from a daily chart (something everyone can easily see)
– We need to find new levels below us so we know where to take profit and where to look for buying opportunities.
Bottom line: crude at the lows = I want to be buying these lows.
905am est
We get news that more ‘strategic’ reserves on crude oil are being released (more supply)
*IEA: TO RELEASE STRATEGIC OIL INVENTORIES; TO RELEASE 60M BBLS OVER COMING MONTH, AT RATE OF 2M BPD for 30 days; will reassess in 30 days- Notes that release of crude stocks to bridge production gaps stemming from Libya crisis, says 132M bbls of production have been lost due to Libya disruption (Note: Libya had produced about 1.6M bpd before the rebel uprising, or approximately 2.3% of global production). – IEA believes that the impact of the supply disruption has been worse for developing economies. – 2M bpd will be available over the next month, and then IEA will reassess. Watching for further developments in oil markets. – US to contribute 30M bbls to overall release of reserves (50%), Europe to contribute 18M bbls (30%), Asia-Pacific 12M bbls (20%). IEA requests that releases from reserves comprise light, sweat crude to replace the high quality oil lost from the Libya disruption. – Follow up: US DoE confirms participation in reserve release, notes that Strategic Petroleum Reserve has been at historic highs recently (Note: US SPR has been at 727M bbl capacity for more than a year). – US Energy Sec Chu: US continues to monitor the oil market situation **Reminder: On June 22nd, the Saudis said there is no oil supply gap and warned that any release of oil from strategic reserves would be aimed at seeking to control prices. On June 15th, IEA Chief Economist said monitoring whether to release strategic reserves on a daily basis.
935am est
935am est
We have the US Markets opening, our next news event is 1000am New Home Sales, alarm is set for 955am
We’ve had three trades today, we bought the lows of the wedges on all three trades on gold and crude oil.
Great day so far, lets plan our attack post-open.
My plan of attack on Gold:
If price rises:
– Im selling resistance as price moves highs
– Im then buying pullbacks once the resistance is broken and turns into support.
– I don’t buy at the highs, I buy with pullbacks.
– I’m selling 1527.7 34r trigger
– I’m selling the highs of the strong bear price channel
– Selling 1532.2
– Avoiding the BMT 1536.3
– Selling the PLOD at 1541.0
– Then buying pullbacks with highs inside the range from Wednesday.
– As price rises I’m selling first, then I will buy a pullback above the levels listed above.
If price falls:
– I’m buying at support levels first
– Then I will sell with a retracement once the support turns into resistance
– I do not sell at the lows, I will sell with a retracement.
– Buying the lows of the strong bearish price channel
– Buying 1518.3, 1514.5, 1511.4, 1509.8, 1508.4, 04.4
– If price keeps dropping we can buy the lows of the 89range wedge at 1500.00
Lets plan our attack on Crude Oil:
If price rises:
– Im selling first at resistance and then buying pullbacks as resistance turns to support.
– Im selling 90.49, or buying a pullback above it
– Avoid the big round number of 91.00
– Selling 91.30, 91.64, 91.87,
– Avoid 92.00
1020am est
The market personality is changing, slowing down, trading sideways, we’re not getting the consistency we had earlier.
Low volume drop this morning was hard to avoid, so we bought the lows of the ranges on gold and crude oil and now the markets appear to be looking to go back up into the range they started with today.
11:10am est
We’ve had a incredible day, now its time to keep this cash.
Our plan of attack for the rest of the morning
Crude oil inside a sideways range, so we will trade the range first, and then look for breakouts.
We also notice a sloppy bullish price channel on the 34r chart, so use this as your guide for buying pullbacks, if we get new higher highs.
As price rises on crude oil im selling the 91.64, selling the range highs 91.86, avoid the 92.00 and sell the 92.21.
Beware the 34r BMT is above us 92.56 and this will be an excellent target, but a horrible place to enter a new trade.
If price falls on crude oil I’m buying support at the lows of the price channel and beware trading around the big round number of 91.00.
We see the lows of the (89r) sideways range at 89.67. I also want to buy the lows of the bear channel at 90.00 but beware trading around the big round number.
I’m buying support at 90.78, 90.62, 90.53, avoid 90.00, buying 89.89 and 89.69
And as price breaks support and turns into resistance we then sell retracements.
Lets plan our Gold market…
Gold futures are trading sloppy and slow around the 89range BMT.
This tells me to be very careful, the BMT are always sloppy, they make great final profit targets, but BMT’s are NOT where I want to enter a trade.
We’re at the lows of the price wedge, and the middle of the new sideways range of the 89range.
and at the highs of the short term bearish price channel from the 34range chart.
Our plan of attack on gold will be…
As price rises im selling resistance, selling the channel highs 1521.0 and the 34r trigger line at the same level.
Im selling the highs of the sideways range as price rises.
Selling the extensions of the bear channel 23.0, 24.0, 25.0 and then sell 1526.3 the highs of the range
