Fake-Out Breakout Fooled Me Once, Not Twice.

815am EST

– The dollar index futures are showing three distinct characteristics, giving us clues to the day ahead:

o Narrow trading range compared to yesterday (very narrow)
o Trading in a range below the trading range from yesterday (not inside day, its an outside day)
o Trading at the lows of the channel (buy the lows)

– These three ‘signs’ from the market tell us that

o We should wait for a breakout because the range is so narrow we don’t want to get chopped up in our trading today

o Expect to see support at the lows of this channel, so the downside moves on the dollar may be difficult, which means all the other markets should see DOWNWARD pressure.

o Its in our best interest to wait for the dollar to make new highs or lows so the rest of the markets will also move more for us.

– How will dollar apply to the e-mini ES?

o Narrow dollar = narrow ES (be careful on the ES until the dollar makes new highs or lows

o If we have support on the dollar, we have resistance on the e-mini ES (and the Russell too) so we should expect to see the dollar RISE, which will translate into the ES falling.

850am EST

– The euro currency futures at its highs means we are looking to sell the highs, and with the dollar bouncing off the lows we saw a nice easy 2-step reversal off the highs on euro futures.

– Now the dollar bounces up, the euro drops, and we wait for the opportunity to buy the lows of the euro.

– Gold futures are at the all-time highs and the highs of the bullish channel, so we are looking to sell the highs.

– We have a sideways trading range on the gold futures from 13.9 down to 07.0 so we can buy the break below 07 for the best opportunity, or buy the bounce off 07 at the lows of the trading range.

– Our 13 range chart on the gold futures shows us a 2-step reversal pattern at the highs with entry short below 1306.7

o Be careful the later this goes to trigger the closed the trend lines get, so we may need to adjust our targets based on the trend line and where it is in relation to my entry.

945am EST

– The dollar index continues to drag us down today with its narrow trading range and slow speed of price action

– While we wait for the dollar to move for us, we are getting all prepared for what may come later this morning.

– Crude oil futures are trading at the highs of the wedge pattern on the slower timeframe 34 range chart, and im looking for the short off the highs below 76.00

– The faster timeframes are very sloppy on crude oil ahead of the 1030am EST news today (crude inventories)

1025am EST

– We have news @ 1030 crude oil inventories and im watching gold futures on a 13-range chart which is perfect for day traders, scalpers, and swing traders

– We have the gold trading sideways just below the highs, so we have 2 options:

o If the buyers take control we can buy the lows with a 2-step reversal pattern above 1310, with profit targets of 11, the trend line above, and then soft target of 13.5, and final hard target of 14.5

o If the sellers are in control we look short below 1306.1 with profit targets much wider to the downside (much better trade than the long) at 5.0, trend line, soft target of 1300.5, and hard final target of 1295.0 (1/4)

1030am EST

– We saw a drop in crude oil inventories which sends the markets swinging around up and down while we wait for a few minutes to enter the market after the news.

– The Russell is trading in a sideways range at the highs, so we have 2 options:

o We can wait for the Russell to rise and test the highs of this range around 674.6 looking for a 2-step reversal pattern at the highs, but we have to wait for that to set up first.

o Right now our best option is to sell short below 68.8, with targets of 67.4, 66.4, soft target at 64.5 (trend line) and final hard target of 56.5 all the way to the lows from yesterday.

o I don’t have much of an option of buying the lows of this trading range b/c I have overhead resistance and support below at 71.5, which keeps me from buying the lows of 670.0, there wont be enough room for the trade room run for me.

1045am EST

– The dollar breaks new highs after seeing the ‘token print’ (new lower low after the consistent higher highs)

– Im watching the Euro currency futures trading sideways at the highs and we have three options

o Fast Track method short below 53, with a 10 tick stop and 10 tick target, make sure momentum and speed confirm your entry.

o We have a 2step short below 64 with targets of 55, 40, soft target of 15, and hard final target of the big round number and trend line at 1.3505 (1/4)

o The third option is to buy the lows of this range, and we need to wait to get above 3613 so we can clear this chop and slop around 1.3600 and get us back to the highs of the day with the final target of 35.