April 5, 2011
- in Uncategorized by schooloftrade
Trading Sideways markets on Gold and Crude Oil Futures
Live Trade Room Notes 04-05-11
– We see 10am news this morning and we know traders will be hitting the exits early as they wait for the FOMC Meeting minutes at 2pm today
– Look for good speed and volume before the 10am news, and then watching for the speed to drop around 1030am
830am est
– We look at the dollar index on the 34range chart and we see the following
– Price channel in pink trend lines, and if we break above 76.400 we will be in the lows of this channel, so buyers will try and take control
– Head and shoulders pattern tells us we should see the LOWS tested atr 76.00 and 75.885 eventually, so expect falling prices on the dollar
– Falling dollar = buying opportunities on the markets we trade
– Sideways range from 76.870 down to 75.885. we are in the middle of the trading range and we know the dollar MIDDLE means the MIDDLE on other markets as well.
– Right now the dollar needs to either move up and get into that channel, or move down and finish off this H&S pattern
845am est
– We see a narrow wedge pattern forming on the 34range of crude oil futures
– We now know more about why the personality is slow
– We also see the 108.00 big round number level is where we sit, which further confirms our concerns about the price action today
– We are trading in the SAME SPOT as we did ALL DAY on Monday, this should be seen as a red flag.
900am est
– We continue to see slow speed of the tape
– We see the crude oil futures trading around the big money trigger lines, which is another red flag.
– Average true range isn’t great, but it isn’t bad either
– It feels like the waiting game for today’s news @ 2pm is here.
Lets plan ahead on crude oil:
– If price rises im selling the HOD @ 108.43, which is also the high of the wedge, and selling 108.60, selling 108.78, and 109.00.
– If price makes new highs, I will also buy pullbacks above these levels of resistance overhead.
– If price falls im buying the PLOD @ 107.58 also the low of the channel, and buying 107.50, 107.34, 107.25, 107.00.
– If price makes new lows through the support I will sell retracements below those levels.
945AM est
– We bought the lows on gold for our only trade of the morning and nice easy winner
– Now we’re trying to stay patient because this market is clearly still waiting for SOMETHING to tell it what to do.
– News @ 10am coming around the corner and we hope to see some action from it
Gold, lets plan ahead…
– Sideways from 1440 down 1431
– Buy the lows of 31.0
– Sell the highs of 37.2, 40.3,
– Buy a pullback above 37.2 if we make now highs
– If price falls im buying 31.0, 27.7
Crude Oil, lets plan ahead…
– Sloppy markets like crude oil today require us to remain focused on the 34range or 89range BIG PICTURE, don’t lose sight of our goal.
– We see a wedge pattern, so we focus on selling the highs and buying the lows, also avoiding the middle
– If price drops…
§ Buying 107.50 the lows of the wedge
§ Buying 107.34, 107.25, all the way down to buying 106.80
§ If prices rise im selling 108.43 the highs of the wedge
· Im selling 108.60, 108.78
· If price makes new highs, I will always look to buy a pullback.
· Remember as prices rise the levels above are resistance, and we SELL resistance.
· When we break that resistance it then becomes SUPPORT and we always BUY support.
· So buying pullbacks as we make new highs, and selling retracements as we make new lows.
1045AM EST
– We’re having a GREAT day trading gold futures
– Lots of winning trades with this sluggish market
– Now its after the 10am news, and before the 1130am European close
– We call this time of the day the ‘dead zone’
– After the last news and before the European markets close we often see price go slow and flat.
– We also know that we have VERY BIG NEWS @ 2pm EST today, so just like a FED DAY, markets will slow down as traders wait for the news @ 2pm
