July 7, 2011
- in Uncategorized by schooloftrade
Price Channels got us started, Crude Inventories helped us hit our trading goal
The US Dollar Index is trading around its BMT on the 89range chart, which tells us today may be sloppier than desired.
Clue #1 from the dollar, 89range BMT = sloppy price action today.
Crude Oil is trading inside day today, which is clue #2
Crude oil trades in a bull channel so looking to buy at support as we make new highs, or as we pullback from new highs.
Gold futures are also trading inside day this morning, below the PHOD made last night when we tested the 89range 33.6 resistance.
820am est
Let’s review today’s news because this is something a little out of the ordinary today.
Monday was a holiday, so the news on Monday got pushed back, and then by Friday we have a mess of news that is out of the normal routine.
Traders are creatures of habit, so trading the news on days that unfamiliar is our biggest concern.
Will traders be active in the market as if it were Wednesday?
830am Jobless claims, nothing knew here, they are always on Thursday.
ADP employment report is on Wednesday’s, and crude oil inventories are also on Wednesday.
The biggest concern will be how to navigate through crude oil inventories today @ 1100am.
We need to remember the 3 phases of crude oil inventories.
· Phase 1 = Before the news (800-10:30am)
· Phase 2 = During the news 10:30 – 11:05
· Phases 3 = After the news 11:05 – 12:30pm
835am est
ADP and Jobless Claims come out as expected and the markets have been looking somewhat decent this morning, just need to be a little faster on the speed right now.
We review our us dollar index 89range chart and we see strong bull price channel and a rising price on the dollar.
Big Clue = rising dollar = selling opportunities on the markets we trade.
Remember the dollar will be used for a negative correlation:
– As the dollar rises im looking to sell crude, gold, euro, Russell, etc
– As the dollar falls im looking to buy
– If the dollar cannot make new highs or new lows I then trade sideways, buy the lows, sell the highs, avoid the middles and the fake-out breakouts.
930am est
We’ve have a great day so far, lots of winning trades, all on crude oil futures.
I guess our fears of the unknown today were not that important.
We have news from the ECB, they have raised interest rates, and they also comment on lower the standards for the buying of debt in the ECB.
The ECB’s version of the Quantitative Easing (QE) buying up the bad debt and pushing it down the road with financing from tax payers.
The personality looks very different than what we saw from 800-930am
Lets be cautious, crude oil may slow way down ahead of 11am news.
1000am est
We’ve got nothing out of this market since 930am
The dollar index is at the 89range bmt in the middle of the wedge pattern. This is a big red flag. Expect sloppy markets
We also have crude oil in a transitional area, at the highs of the bear channel and the lows of the bull channel, looking for something to break it free.
1030am est
The dollar index has dropped off its highs, seeking shelter from the news later today and tomorrow morning.
We never like to see the DX charts at the BMT’s on multiple timeframes.
This is something that occurs before a major news event when the bias is no direction.
1100am
News comes out on crude oil bearish, but the market wont push through 99.00 so we had to wait.
1130am
We took a loss on crude oil trying to buy a re-test of the High of Day, but that was a TOKEN PRINT and we quickly were able to get into the short side for 3 winning trades to finish our day with a BANG!
Our final trade of the day went from top of the channel to the lows of the channel for a $450usd winner!
Now we look for the European close to come and give us some more volume and some new ‘personality’ on the markets we trade.
