Flat Dollar Index Makes Trading Crude, Euro and Gold Futures More Difficult

830am est

– The dollar index is trying to find its bearings this morning after a rollercoaster ride on Friday evening.

– Lets compare the trading range for today to the previous range

o Clearly we’re a lot more narrow than we were last Friday, but we cant trust this comparison
o Inside day (trading inside the trading range from Friday)
o Very narrow trading range
o Average true is falling (ouch!)
o 3 strikes and we’re waiting patiently this morning!
o Things will be slow and choppy, and narrow and more challenging with the dollar trading like this.

 We’d rather see:

• Rising ATR
• Price ABOVE/BELOW the range from Friday
• Wide trading range, something wider than we saw last week.

o Add a price alert indicator to the highs and the lows of the trading.

 This will tell me when things change.

900am est

– Crude oil futures are trading sideways in a wide wedge pattern

o Shows narrowing price action as the day goes on
o Sell the highs of the wedge
o Buy the lows of the wedge
o Avoid the middle

1030am est

– The dollar index has been slow and sluggish, causing us to lose confidence and direction for the markets we’re trading.

– Its important that we avoid the higher risk entries when the dollar looks like this, so we must remain patient.

– The euro futures are trading in a wedge pattern, so we sell the highs and buy the lows, avoid the middle of the range.

o The dollar and the euro are closely correlated, so when the dollar moves the euro will move, but if it doesn’t move, we need to be carful.

1045am est

– Dollar index futures testing the daily highs, still in the middle of the trading range
– Looking for shorts if we break new highs on the dollar index
– Euro short, crude oil short, gold short, Russell is also an option

1115am est

– The dollar broke highs after testing

– Took the euro futures short on the dollar breakout upside

o Not much moving on the Euro
o Frustrated, just missed the big move on crude oil and gold
o Lets check them again

– Crude and gold off the highs, I missed the short, so looking to get long on the bounce off the PHOD on crude oil.