May 11, 2011
- in Uncategorized by schooloftrade
Profit from easy CLUES from Crude Oil this morning
We review the crude oil 89 range chart to start our day with the most important information
We see the the CL 06-11 is trading right on top of the 89 BMT, which means this area TODAY may be sloppier than normal. We also have 1030am crude oil news, so this may be the reason why prices are sitting at the BMT.
It appears we are trading in the middle of the larger trading range on the CL right now, and we want to avoid the middle. The goal this morning will be to stay patient and wait for price on crude to test the highs or the lows of the range.
The highs of the wedge around 105.00 make a great spot to sell, and the lows of the wedge are just below 100.00 so we look to buy the lows.
If we sit on the 100.00 level today this will also be a challenge.
Open the 34range chart on crude oil this morning and we see the following:
– Price Wedge
– Price Channel
– Sideways Range(s)
– PHOD / PLOD above/below us (inside day)
– Major levels above and below us
– BMT in the middle
– OPEN at the highs of the wedge
Our plan of attack when trading crude oil:
If price rises:
– Selling the highs of the wedge
– Avoiding the OPEN as a sloppy area
– Selling the PHOD
– If we keep making new highs I am buying pullbacks using this bullish price channel as my guide
If prices fall:
– I will avoid the big money trigger line at 102.28
– I will buy the lows of the channel at 102.51
– I will buy the support at the highs of the minor wedge at 101.00
– Buy the PLOD 100.12
– Avoid the 100.00 big round number
– Buy the lows of the wedge below 100.00
– If we make new lower lows I will then sell retracements
– Never selling the lows, im looking to buy the lows/support first.
– Remember that after 1015am this morning this crude oil market becomes higher risk with 1030am news.
830am est
– We have news to wait for the news to come out
– News come out within range and price is still pretty slow and sloppy
900am est
– We have crude oil at the lows of the channel
– We want to buy the lows of the channel, so look to buy pullbacks or use the 2step price reversal at the lows.
910am est
– We followed our plan perfectly!
– We avoided trading with bad speed, we read the tape and we traded with our rules
– A little sloppy today and with 1030 news we’re certainly
920am est
– We tumble off the lows of the channel and we sit on the 34r Big Money Trigger Line (BMT)
– We need to wait for the 930am US OPEN to come and go, and then we will get back to trading.
– This is great time to re focus and take a 3 minute break, stretch your legs and get back to work for the next 2 hours.
940am est
– We see the new lows on the crude oil, after the buyers failed we traded the wave short for an easy failure pattern
– Now we look at the 34range (now we have lower lows, we look for a channel) bearish price channel.
– Our original plan was to use the bullish channel as our guide
– This plan now appears to have changed with new lows, we have a new channel and this will now be our guide along with the major price wedge
– This new bearish price channel now gives us a new plan of attack trading crude oil
– If price falls:
o Selling retracements inside this bear channel
o Im also looking to buy support on the way down with a price reversal pattern
o Buying support at 101.0, the lows of the bear channel, 100.71, the PLOD 100.12
o Avoid trading around the BMT at 102.29
– If price rises:
o Buy the lows of the day, the lows of the range
o Im buying pullbacks with new higher highs
o Im selling overhead resistance first, then looking to buy with new highs
o Buy above the 34r trigger at 29, but beware this will be sloppy, tough to tell when the 34r trigger line is OFFICIALLY BROKEN
o Sell the highs of the bear channel at 102.50
o Sell the resistance at 102.60, 102.98, the LOWS of the channel above us, sell 103.32 and 103.61 as price rises
o Im selling as price rises
1000am est
– We see the personality change from easy trading to more challenging, sloppy speed and price action
– We know we have news at 1030 so lets sit on hands and wait for better price action
1030am est
– We get crude oil inventories come out right now
– I want to wait until I can tell WHO is in control after the news
– The first move, maybe even the 2nd move will likely be the fake-out breakout
– Its vital that we don’t get into trade too early after 1030am
– Higher inventories come out at 1030
o Higher inventories may mean 1 of 2 things
o Less demand in the market results in rising inventory
o Higher inventory because of MORE demand and the producers of CL are trying to satisfy the demand
1115am est
– We continue to stack the profit this morning following our simple plan of attack
– We are well above our daily goal
– We need to be patient and wait for the best trades to finish our day
– Crude oil is at the highs of the bear channel
– Sell the highs of the channel, or wait to sell the resistance above you
– Sell the highs of the channel below 101.39
– Or sell the resistance above the highs of the channel at 101.95
– Beware, the BIG ROUND NUMBER of 201 is right next to the BMT on the 21r
– I would look for a test, and a failure to break above the 102., then sell at 101.95 or lower.
