September 14, 2011
- in Uncategorized by schooloftrade
Wacky Wednesday and Retail Sales
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The James’ Report: Professional Resources for Professional Traders
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– Crude Oil trades ‘inside’ and in the middle of the range
– Gold looks very similar, in the middle of Tuesday’s trading range
– Euro trades at the highs of Tuesday’s range
– Russell trades higher than Tuesday’s range, making today and Outside day
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– Traders prep for Retail Sales here in the US this morning
– European shares opened in negative territory following European debt concerns but turned positive in mid-session as Barroso uttered the magic word: eurobonds
– EU Parliament debates debt crisis
– Moody’s cuts several French banks one notch; shares recover from opening level lows
– China CB advisor Li: China should not buy large amount of EU bonds
– China Premier Wen: World must get house in order, not rely on China
– U.K. jobless data were slightly better than expected
– Obama is not the king of Queens as House seat falls into republican hands
– According to the UK think tank the Institute for Public Policy Research (IPPR) 2 million jobs has been lost since the recession. The reduction of the corporate tax rates and creation of enterprise zones were an inadequate response to the employment crisis. There is little evidence that the private sector will absorb public sector job losses in the next four years.
– The Irish Central Statistics Office (CSO) reported that consumer prices in the country are the fifth highest in the Euro Zone, and 18% higher than the Euro Zone average. The CSO added that Irish unemployment was the sixth highest in the EU. The article also noted that more people are living in poverty.
– Credit rating agency Moody’s commented on the recent release of the ICB bank report. The report will not immediately impact ratings for British banks, though it is a credit negative for bond holders over the long-term.
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Today’s Economic News:
Looking at the news this morning, we have 830am Retail Sales and Producer Price Index (PPI) which will hopefully get the volume and opportunities going early this morning. We then wait through the US Open at 930am into 1000am Business Inventories followed by a very important 1030am Crude Oil Inventories. We remember to follow the 3 phases of crude oil inventories on Wednesdays, so keep an eye on the time.
We do expect today to be a little ‘wacky’ on the Wednesday ahead of OPEX, so keep that in mind, and we will address our specific plan of attack for the market personality we see after 830am today.
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Looking at the Charts:
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We get 4 clues from the euro:
Sideways range, which tells me to buy the lows, sell the highs, avoid the middle. Buy pullbacks with the break through the highs, and sell retracements with the break through the lows.
Bull Channel tells me that buying at support, and buying pullbacks above 1.3738 will be the higher percentage trades today.
Inside day tells me to sell the PHOD, buy the PLOD, and avoid the middle of yesterday’s range. Also tells me to buy pullbacks with highs above PHOD and sell retracements below the PLOD.
Price Wedge tells me to sell the wedge highs, buy the wedge lows, and avoid the middle of the wedge. Today we have a Bull-wedge, which means that buying at the lows of the wedge and buying at support will be the higher % trade this morning.
We have the transitional area to look at 3811. If we go above this level we buy pullbacks. If we fail to break this level to new highs we then treat it as a FAILURE and we sell, target going back into the range below 3738.
What if price rises?
Im selling the PHOD as resistance first, then if we break above the PHOD 1.3738 then I will buy a pullback. If we see the new highs fail, I will look to sell the failure as soon as price gets back below the PHOD.
What if price falls?
Im buying at support because of the bull channel. Buying the lows of the wedge at 1.3634, .3600, and 3556.
What if price goes sideways?
If we are at the highs of the range, i want to be ready for a breakout, and then look to buy the pullback.
If we trade sideways in the middle of the range Im sitting on hands.
If we trade sideways at the lows of the range im looking for the breakout to sell a retracement.
Russell Futures 89 range chart shows us distinct price structures today:
Outside Day, might turn inside
Price Wedge
Sideways Range
Bull Price Channel
New move to a faster timeframe to find the intra-day levels on the russell
We then move to the 34range on the russell to plan our attack:
Sideways range tells me to buy the lows, sellt he highs, avodit he middle.
Outside day says to buy pullback with new highs, and if we FAIL and tumble back below the PHOD 689.6 we then consider this to be very bearish and we want to sell.
Bull price channel tells us that the long trades will be higher percentage, and when price falls we can buy at support, and buy pullbacks with new higher highs.
Price Wedge tells me to expect a fake-out breakout at the highs and the lows of the wedge, so sell the highs, buy the lows, avoid the middle, and look for the failures of the breakouts.
If price rises?
Im buying pullbacks above the PHOD 689.6 but I am concerned about the fake-out breakout (price wedge) so make sure the breakout has ‘personality’ and momentum looks perfect.
I will expect fake-out breakouts today with the price wedge, so look to sell as price rises, until the buyers prove they are in control.
If price falls?
Im selling short with retracements below the 689.6 PHOD as it turns to an INSIDE DAY.
I will avoid the middle of the wedge around 681.0 and the BMT 679.5
I will buy the channel lows starting at 675.0 down to 671.9, and 669.8
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