Sideways Markets Strategy for Euro and Crude Oil Futures

Today’s trade room notes…

– We have contract rollover from last week we need to catch up with
– E-mini roll over quarterly
– Gold Futures rolls over every other month (semi-monthly)
– Crude Oil Futures rolls over every month (monthly)
– We moved our charts forward to the 12-10 contract for the e-mini’s and the currencies
– We will check the volume later this month for crude oil and gold futures contract rollover

Let’s take a look at the markets…

– Euro futures right in the middle of its sideways trading range and trading around the big round number of 1.2800

– Gold futures trading sideways and low volume at 1245.0 which is just off the highs from last week

– Crude oil futures are trading back in the sideways range from 2-3 weeks ago after sitting at the lows all last week.

– Emini Russell futures are trading sideways off their lows from last week of 600.0

– What do we notice most?

o Low volume
o Sideways markets
o Sluggish start to the week.

900am EST

– Crude oil futures are trading at the highs of the new wedge pattern just below 77.00

o Buy the lows of 73.00
o Sell the highs of 77.00
o Avoid the middle around 75.00

 We also notice on the 13 range chart that we are now above the bullish channel, and the 77.00 appears to still be an excellent location to sell short, in this case, selling the highs of the channel.

930am EST

– We see the US open come and go, very little price action so far
– Euro and Crude Oil futures are now trading at the highs of the range, so im looking for 2 options:

o Buy crude oil as it breaks out above the wedge
o Buy the Euro as it breaks new highs into the bracket above the wedge pattern

1045am EST

– Looking hard for patterns, but the lack of volume this morning on the first day back is a little less than we need.

– We took the breaker long on the euro 13-range above 2844 but had to flatten at entry +1 when we see the market begin to shows signs of a price reversal

– Check the dollar correlation for the reason why we did this:

o Euro at the highs with overbought momentum (higher risk)
o Dollar at the lows with oversold momentum (higher risk)
o We need to watch the correlation closely with trading the euro