June 27, 2011
- in Uncategorized by schooloftrade
Monday’s are best for this strategy, 100 ticks on Crude
820am est
The US Dollar Index is in the middle of a price wedge, and we know this can lead to sloppy markets we trade most.
Time is NOT on my side if we don’t break this wedge, and I will use this as an overview of the markets today.
Short term trend is DOWN, using the 13-range chart of the DX 09-11 we see lower highs and lower lows as we head down towards major support at 76.00
76.000 will result in 1 of three things:
– it may hold, and price rises back up to the highs
– it may trade sideways at this level, no direction up or down
– it may trade right through, making new lower lows and continuing this trend short.
We will then use this information to trade with:
– rising dollar = sell retracements at resistance (support holds)
– sideways dollar = buy the lows, sell the highs, avoid the middle, avoid fake-out breakouts (sideways)
– falling dollar = buying pullbacks at support (support breaks)
900am est
We got news at 830am that was as expected, so the markets trade sideways with very little volume.
We have slow markets for many reasons:
– transition into the summer time here in the US
– Crude Oil is under fire with OPEC and IEA in a fight over control.
– Gold is flat because of rising dollar and rising fears.
– Monday morning and traders are looking for something to MOVE first, before they trade.
925am est
Sitting on hands waiting for the US Markets to OPEN at 930am est.
We notice the US Dollar Index is now trading higher with a new bullish price channel.
This almost confirms our plan of attack from earlier this morning.
Rising Dollar = selling at resistance/selling retracements as we make new lower lows.
We can’t assume it’s a bull trend yet, we need to break about the 76.400 (overhead resistance trend line)
940am est
We review crude oil futures and we see the following:
– BMT / OPEN is above us
– Price Wedge Bearish
– Price Channel Bearish
– Sideways Ranges (big round numbers)
– Triple bottom at the lows
The biggest clues we get are the ‘inside day’ and the price wedge.
My plan of attack trading crude oil:
If price rises:
– The high % trade is to sell at resistance (bearish channel, bearish wedge, triple-bottom)
– I will always sell at resistance first, then look to buy pullbacks with new higher highs.
– I don’t buy the highs, I buy pullbacks off new higher highs
– Im selling resistance levels as 90.56, 91.00, 91.30, 91.47, etc all the way up.
– Im avoiding the OPEN 90.71, the P.OPEN 91.16, and the BMT at 91.23
– Also want to avoid the middle of the ranges around 90.40 down to 90.20 (at least for the time now)
– Avoid the big round numbers, 89.00, 90.00, 91.00, etc.
If price falls:
– I’m buying the lows and buying at support as price falls (inside day, price channel, price wedge)
– I’m buying first, then selling once support breaks and becomes resistance, I then sell with a retracement off new lower lows.
– I don’t sell the lows
– Avoid the big round numbers 89., 90., 91.
– Buying support at the lows of the price wedge around 89.90
– Buying support as the LOD 89.61 and then looking to buy at minor support at the extensions of the price channel.
– We also located major support on the daily chart 89.70, 88.00, 85.50 and 83.85
–
950am est
We follow our plan of attack and buy the lows of the range around 89.80 on crude oil for our first winner of the day.
Price retreats back into the middle of the range and we look for a possible high-risk wave pattern short on the 34range chart.
1025am est
We are reminded of the ‘inside day’ we have today as we trade in the middle.
Our plan of attack was…
· Sell the highs
· Buy pullback with new higher highs
· Buy the Lows of the range
Now it’s up to US to keep the money we’ve earned this morning
Be selective!
1040am est
The personality changed and we get sloppy after failing at the highs of the range
We sold the highs for an easy profit, but we can’t find another trade until we get back to the highs or down to the lows.
This center of the range is clearly around the OPEN, around the middle and is very sloppy.
1100am est
We continue to see sloppy price action, fake-out breakouts and we continue to wait for a little more confirmation before we enter our trades.
The personality we’re seeing is EXACTLY what we spoke about at 800am est today.
Crude Oil is on its heels, inconsistent and indecisive b/c of the events from OPEC and IEA.
Now it’s time for Members-Only Training @ 1130am EST.
