February 2, 2011
- in Uncategorized by schooloftrade
Snow can’t stop day trading profits, Sell the top of the channel on Crude Oil and buy a pullback on the Gold Futures
820am est
– We saw 815am news with very light volume as the ADP employment news gave traders a heads up for nonfarm payrolls on Friday morning.
– The snow storm across the US may have an impact on the opening of the physical pit on gold, crude oil, and other markets, but remember most of the volume is traded electronically.
– We already know we have big news on Friday, so we’re keep a close on the volume, speed, and average true range looking for signs of life in the market this morning.
830am est
– The dollar index is slow and sluggish at the beginning of our day
– We know this can change quickly and our goal it to define the personality NOW, and then track the changes to the market’s personality as the day develops.
– Speed is slow, but this can easily improve
– The dollar average true range is showing now lower highs and lower lows, this shows signs of a fundamental narrowing of price action.
– Compare this to late last week and we have HIGHER HIGHS and HIGHER LOWS and the price action was wonderful, nice and volatile with plenty of moves.
– The short term ATR shows it rising, so this is promising, but we look at the big picture and we the price is getting narrower overall.
– Im focused on rising or falling ATR, so watch that most importantly.
**we get notice the CME group will be open @ 11am EST due to snow**
– We’re not convinced yet that this snow is going to ruin our day, I doubt it, but we will be on the look out for low volume and lack of follow through.
845am est
– The gold 34range chart shows us in a very tough spot.
– We’re in the middle of the wedge, at the end of the wedge, so very narrow here
– Speed is very slow, and the dollar isn’t moving which isn’t helping either.
– Lets plan how we’re going to trade this wedge pattern on the gold
– We see support at 1333.1, so look to buy if we drop to this support.
– If we break out below the wedge and test 1329.3 that will be another great buying opportunity, expecting price to go back up into the wedge.
– We can see even further down we have the PLOD at 1326.0, this will be an excellent place to buy support and look for the bounce.
– The key is buying at support and not buying into resistance.
910am est
– The speed is still very slow and we’re taking our time looking over our charts getting prepared for the market to make its move.
– The crude oil 34range chart shows lots of different things to watch
– Long term bullish price channel (green) and we are at the lows of this channel, so buy these lows above 91.46 for the long term hold up to 92.00, 92.45, and finall 93.00 for the 2-top at the highs.
– Day traders and scalpers will use the short term price channel in pink
– We are in the middle of the short term channel, so we need to be careful.
– Buy the lows, sell the highs, and very important to avoid the middle of this range.
915am est
– We wait for the us markets to open, they will be opening late today due to snow, but the electronic markets will be open already
– The dollar average true is now dropping, taking some of the wind out of our sales this morning.
– Average true range on the crude is lower lows and lower highs, but rising, so we need to be patient today and wait.
1030am est
– We have the crude inventories out as expected, gasoline inventories rose sharply, but for the most part we are as expected.
– Now we need to wait and see how the market reacts.
– Without any large drop/pop in the news number we need to be patience and wait to see WHO takes control over price.
– We have a number of winning trades in our account today, so its up to US to keep that profit.
1100am est
– We now have the CME opening of the pit, 1.5hours late and we assume that new traders are entering the market and taking their time to see what the price action looks like.
– We also know that after our last news event and before the 1130am euro close we tend to see the DEAD ZONE, slow speed, low atr, and narrow ranges.
– Look for better price action after 1130am est
– We see the gold market has large WICKS that tell us to be careful, this market needs direction.
