Tuesday, September 10, 2013

Crude Oil Day trading strategy; Morning Prep Screen to Floor 09/00/13

Focus-Points this morning:
·       Syria strike risks are lower today after Russia proposed that Syria put tis chemical weapons under international control or destroy them in order to avert western military action.
o   Iran and China showed support for this proposal
·       (US) President Obama to meet with Republican Senators today, and will air 6 different prime-time TV interviews trying to rally support for a military strike on Syria.
·       Risk appetite continues to rise on positive news from China
·       Chinese Retail Sales hit 7-month highs
·       Traders continue to look forward to the September 17th FOMC Meeting, next Wednesday.
·       IEA’s Head Van Der Hoeven says ‘oil market is sufficiently supplied’, sending Crude Oil prices lower overnight.

Economic News on the schedule today:
Crude Oil News
This morning the news calendar is very light, with most traders focused on the developments coming from China’s positive news overnight and the developing story out of Syria.  Today President Obama meets with Republican leads in the US in hopes to find a final solution.

The only report we have to consider today is the JOLTS report (minor news) which is expected to see a tick lower this morning at 10:00am EST.

On days without any major news to work with we must assume the price-action will be a little sluggish at the opening-bell, however we have a LOT of geo-political news that is coming out today to keep us busy looking for high-percentage-trades.

Crude Oil Analysis:

Crude Oil is falling lower this morning after news from Syria is calming everyone’s nerves regarding a possible military strike, and reacting to major resistance zones overhead.

Crude Oil Anchor Chart #1
We begin with the anchor chart #1 this morning and we can see price-action has tested the support zone at 108.74 and we are sitting inside this zone at this time.

Prices fell off the resistance zone at 110.52 (just as we predicted on Monday) so we have been selling short on Crude Oil since the beginning of the week.  Now, we sit-on-hands and take our profit while price-action sits on top of support.  Once we get a new lower-low we will then get back into the short trading down to 107.61.

Crude Oil Anchor Chart #2
We move to the Anchor chart #2, and just as predicted on Monday, we see price-action has moved lower and tested the support level at 108.22.  This support level is in addition to the support zone on the Anchor Chart #1, so we know there is a LOT of support here and we need to wait to get into our next selling-opportunity with new lower-lows.

Last, but not least, we look at the 30-Minute VIP chart to get an idea of what’s happened coming out of London and we can see some very important clues that will help us look for trading opportunities this morning.

Crude Oil VIP Chart
First, we can see there is yet another narrow trading-range coming out of the London trading Session.  We typically see a $1.00 trading-range from the overnight London trading Session however today we only had $.47 which tells us the markets are waiting for something. 

Second, we can see price-action on Crude Oil moving BELOW the PLOD, which is a 
very bearish signal for us, and we will sell short from below the PLOD down to the next major support level, which is the low of day from 09/05/13 at 107.13.  We may also be able to use the 106.58 PLOD as a runner profit-target.

Third, we can see the previous week’s lows at 104.21, which is going to be our ‘home run’ profit-target this morning for the selling-opportunities today.  If the news starts to come out ahead of Obama’s interview this evening we may see this price-action start to run HARD to the lows.  

Crude Oil PIT Session Levels
If we see this market personality take off to the downside we know exactly where it wants to go and we will hold our runner profit-target all the way down to 104.21.

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