December 1, 2010
- in Uncategorized by schooloftrade
Market Prep for day trading crude oil, gold, euro futures
Good Morning Everyone, we have a busy day ahead of us!
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Crude Oil Futures:
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Looking at our slower timeframe we can easily see some clear patterns today:
– Top of the price channel (yellow)
– Top of the price wedge (blue)
– Middle of the overall trading range from 89.00 down to 80.00
With that said, lets focus on selling the highs first, and then worrying about buying the support afterwards.
Looking to sell short off the highs of 85.00, taking profit at 84.75, 84.00, and 82.83 on the way down. The ultimate goal is to sell the highs of the channel at 85.00 and take final profit at the lows of the channel around 81.45.
We will also get a buying opportunity at the trend line support around 84.00, so look to buy here when the market drops off these highs. Tape Reading and volume analysis will be key to understanding if this support will hold or if it will break, so pay close attention to the pace of tape indicator around that level to make your buying decision.
We have a strong trend line support at 84.00 so I would look to take profit on your short trade off the highs, or look to enter long here buying support, with the final target of 85.00 (back to the highs)
Look for the breakout trade above 85.72, but im going to be extra careful trying to buy the breakout above this price channel because you can easily see its been a rocky ride above 85.00, so don’t be afraid to wait it out through 86.00 to make sure this market is really breaking out.
Gold Futures:
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Gold has broken its price channel to the upside, so we have a very bullish market on our hands.
I can see we broke the price channel, and the top of the wedge, so we have two options:
– Is this market going to keep going?
– Or will this market now reverse back into the range below us?
The key today will be the news events and the dollar.
If we see news that is bullish for the dollar, expect to see Gold come back down, and if the news is bearish for the USD look for gold to keep moving up to exceed the 1400.
So how do we trade this?
I’m going to be buying support first at 1388.8, looking to buy low at support and take profit at 1400.0
If the market wants to keep moving up from there without a pullback I need to wait for the opportunity to buy a pullback, so wait for price to test the highs, pull back off the highs, and then look to buy at support, such as 1395.6, 1397.0 or even as high as 1400 if this market really moves up.
If the dollar rises and gold drops im looking for entry short below 1387.6 to make sure I have room to run to the downside.
I’m looking to take profit at 82.5, 77.5, and of course my final target goal will be the lows of the price channel (yellow trend lines) around 1359.7.
If we find ourselves back at the lows on gold, I will always be looking to buy, so keep an eye on support as we keep rising today.
Euro Futures:
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The Euro is still playing at the lows of the price channel (yellow trend lines)
– Buy the lows of the price channel
– Avoid the middle of the price channel
– Sell the highs of the price channel
So im going to have a hard time selling short right now long-term, im looking for the long side.
You can see we have 1.3100 to clear at these lows, so look long with buyers above the big round number, taking profit at 37, 1.3200, and final target is the highs of the price channel around 1.3450.
I’m expecting the Euro to be affected by the news today, so keep an eye on news that is BEARISH for the dollar index.
Dollar dropping will give us buying momentum on the Euro, so keep an eye out for poor news events today for the dollar to help your euro trade.
See you in the trade room!
