Outside Days show us trading opportunities with new highs

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The James’ Report: Professional Resources for Professional Traders

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– Crude Oil pushes through Monday’s Highs

– Gold trades in the middle of its multi-day trading range, holding at the lows of Monday’s range

– Euro trading at Monday’s highs

– Russell trading at Monday’s highs

– European shares hit two-year low for the second straight session on European debt worries. A particularly alarming press report noted that a BNP Paribas executive stated that the bank had trouble borrowing in US dollars as US money market funds are not lending to European banks.

– France BNP Paribas bank denies rumors of USD funding problems

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Today’s Economic News:

We begin the day with Import/Export Prices at 830am which should hopefully give us some volume on this Tuesday of Quadruple Witching. We then go through the open at 930am, and then we dont have any more news until 200pm this afternoon with the Treasury Budget.

We can expect volume to come in early this morning, however, with early afternoon news we then expect volume to taper off quickly after 1130am this morning.

As always, we will be reading tape, looking for market personality after 1130am to know when this market is too dangerous to trade.

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Looking at the Charts:

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My plan of attack using these 3 clues will be the following:

Bull channel says As price rises im buying pullbacks with new higher highs. As price falls to support im buying at major support.

Price Wedge tells me to sell the highs, buy the lows, and avoid the middle of the wedge.

Outside Day tells me the buyers are in charge (above PHOD) so im buying pullbacks with new highs, and buying at support if price drops to major support. Outside day becomes inside day when we break below the PHOD 89.21 and the entire structure changes.

We’re going to be using this bull channel, hand in hand with the outside day to keep buying at support as price rises.

Im going to sell the highs of the major wedge around 90.48 but I can buy up to that major resistance.

If we fail at these highs and tumble back into the PHOD and this becomes an inside day we then want to sell the break below the PHOD 89.21.

If price keeps falling below the PHOD we want to look to major support around 88.00 down to 87.24 to buy the support outside of the bull price channel.

Euro is trading in a narrow, sideways range, with a price wedge. We want to fade the highs and the lows. So buy the lows of the wedge and the range, sell the highs of the wedge and range, and avoid the middle of the wedge.

If we make new highs, sell them. If we make new lows, buy them. Be patient not to trade the middle.