September 21, 2011
- in Uncategorized by schooloftrade
Traders Prepare for Operation Twist & FOMC Announcement
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The James’ Report: Professional Resources for Professional Traders
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– Crude Oil trading in the middle of it range, inside day
– Gold trades at the highs of its range, inside day
– Euro trades in the middle of its range, inside day
– Russell trades at the lows of its range, inside/outside day transition
– Fed watch as market is positioned for “Operation Twist”
– Market is nervous over more SNB peg action
– European shares slipped in light volume trading session which is plagued by uncertainty in Europe and ahead of the Fed’s meeting today. Investors are highly anticipating the FOMC’s meeting and expecting the Fed to at least rebalance its portfolio of bond holdings towards longer-term securities in order to lower long-term borrowing costs.
– France is expected to launch a state bank for small and medium-sized companies. According to the French press, the purpose of the move is to improve the financing conditions for these types of companies.
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Today’s Economic News:
Today’s news for day traders is focused on the FOMC Announcement, and today’s FOMC is going to be a little different than in the past because of this term ‘Operation Twist’, which the US has seen before, but not in a LONG time. Most traders will be waiting to see how it goes before they jump into the markets this morning, so I will expect to see consolidation at the very worst ahead of FOMC announcement at 215pm est today.
Today will be a busy day, starting with 10:00 Existing Home Sales, and 1030 Crude Oil Inventories. Remember to watch the 3 Phases of Crude Oil today so you know how to trade around this major news at 1030am.
We expect to see volume taper off early today, with the FOMC announcement we will see slop after 1100am, however, that may be earlier today with this special case of ‘operation twist’ on everyone’s minds.
We will be watching speed, volume, and market personality at 1045am and will know more at that time.
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Looking at the Charts:
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Gold Futures have three price structures
· Price Wedge
· Inside Day
· Sideways Range
All three of these ‘structures’ tell me the very same thing.
As price rises, im selling. As price falls, im buying.
Expect fake-out breakouts, and beware the failures above the highs and the lows.
As price rises im selling the wedge highs and selling at resistance above the wedge highs. Im selling the PHOD 1816.5.
As price falls, I’m buying the wedge lows, and buying the support levels below the wedge lows. I’m buying the PLOD 1772.0
If price trades sideways I need to avoid the middle of this range around 1800.
The best trades we get today will be at the highs and the lows of this range, so be patient for those levels to be tested.
Euro Futures have the same price structure as the gold, so we are selling as price rises, buying as price falls and avoiding the middle of this range.
If price rises im selling the wedge highs and the PHOD 1.3738 as well as the resistance levels above the wedge.
If price falls im buying at support, buying at the lows of the wedge and the PLOD 1.3590. Im buying the support below the price wedge all the way down to 1.3500
If price trades sideways i need to avoid the middle of this trading range, the best trades today will come at the highs or the lows of this range.
Crude Oil Futures are also showing similar price structures ahead of the FOMC Announcement at 215pm today.
· Price Wedge
· Inside Day
· Sideways Range
My plan of attack is very simple, buy the lows, sell the highs, avoid the middle. Expect to see failures at the highs and the lows, assume fake-out breakouts.
As price rises im selling resistance levels at the highs of the wedge, the PHOD 87.68 and the resistance above the wedge.
As price falls im buying the support levels at the wedge lows, the PLOD 85.59 and the support levels below it.
If price trades sideways im avoiding the middle of the range around 86.50
Russell Futures have 3 price structures, similar, but different than the previous three markets we’ve prepped for today.
· Price Wedge
· Sideways Range
Difference is…Outside Day, possible Inside Day which is not the same as the others.
As price rises im selling the wedge highs and the PHOD 708.3 and selling the resistance above the wedge.
As price falls im buying the lows at support, buying the wedge lows and the PLOD 685.0
If price breaks out lower than PLOD we then turn OUTSIDE DAY, which means the sellers are in charge and we look to sell new lower lows with retracements.
As price drops im keeping an eye out for price reversals, and looking to buy the wedge lows around 665.8
If price goes sideways I need to avoid the middle of the range and the BMT at 688.5
**We see a BEAR CHANNEL on the 34range chart, which tells us the SHORT SIDE is the higher % side this morning.
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