June 6, 2011
Inflation concerns send markets moving early this week, Crude Oil moves lower ahead of CAD News
News out of Europe paints a concerning picture about economic growth, and news in the US is concerned about inflation over the weekend, sending the dollar index dropping, and moving markets around the world early this week of trading.
This morning we do not have any major economic news to worry about, however, we do have Building Permits out of Canadaat 830am and then later this morning we have Inflation news from Canada at 10:00am (what I call ‘CAD News’) which is correlated to the Crude Oil Futures markets we trade. Canada is a large exporter of crude oil, so this will be something to watch for at 830am EST today to get the markets moving. We may not have any news for the global marketplace, but this news from Canada should give us something to trade on a Monday morning without any major news.
Let’s look at the charts we’re watching today…
The dollar index is trading lower this morning, with a bear price channel and major price wedge on our 89range chart of the DX 06-11. You can see we have stalled at the wedge lows, at the lows of both the wedge and the bear price channel. At this point I can see three options for the dollar. Will it retrace back up to 74.345 the trigger line? Will it keep dropping to new lows and test major support at 72.860? Will it chop sideways looking for directional clues from the news? We don’t know yet, but the bearish channel certainly tells me to look to the short side of the dollar, and with our dollar correlation that means we will assume at first that long side positions will be higher percentage trades (as long as the DX keeps dropping of course, we will have to see!)
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| Dolar Index (Click me) |
Crude Oil Futures continue to trade sideways, giving us plenty of trading opportunities this morning trading inside or outside of this price structure on the 07-11 contract of Crude.
The price wedge and sideways ranges make this a pretty simple plan of attack. As price drops im buying at the levels market on our 89range chart, using price reversal patterns at support. If price rises im selling at the major resistance levels overhead using 2-step price reversal patterns at the highs. As always, if price keep moving in one direction up or down I will consider buying pullbacks with new highs or selling retracements on breakouts with new lower lows. Don’t forget the 100.00 level and the BMT make a dangerous location to trade, and we will be defining our specific entry locations in our live trade room this morning.
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| Crude Oil, Click to enlarge |
Its going to be an exciting and profitable week, come see us in the trade room!
