Thursday, September 5, 2013

Crude Oil Day trading strategy; Morning Prep 09/05/13


News coming out of London Overnight:
News coming out of London was nothing but bullish this morning as we prepare for the opening-bell here in the United States.  We have a day filled with important news to watch today.

With the September FOMC Meeting on September 17th, we know that Friday’s Non-Farm Payroll news is going to be a pivotal part of the decision to begin the discussion on ‘tapering’.  Today we have four (4) separate news reports that will all be used in Friday’s Non-Farm Payroll report.  We will be watching today’s news very closely for clues to see what Friday’s report will look like.


Focal Points this morning:
·       G20 Meeting begins in Russia
·       Confidence is building in the EU this morning as recent news has been very positive
·       Spain sells record number of 5 and 10-year bonds, at their lowest yields since 2010
·       Upcoming Central Bank meetings at the Bank of England and the ECB
·       US Auto Sales show strength, same goes for Europe
·       September Fed Meeting is Sept 17-18th
·       Friday is Non-Farm Payroll Report, highly anticipated

Economic News on the schedule today:
Crude Oil News
8:15am          ADP Employment Report
8:30am          Jobless Claims | Productivity & Costs
10:00am       Factory Orders | ISM Non-Mfg Index
10:30am       Natural Gas Inventories [minor news]
11:00am       Crude Oil Inventories




Crude Oil Inventories
Last night’s Crude Oil API Inventory Report showed a draw for inventories, which is bullish for Crude Oil as we go into the opening-bell in the US today.  We will be watching for reaction to this news at 11:00am EST today with the EIA Inventory report.


Crude Oil Analysis:
Anchor Charts:

Crude Oil Anchor Chart 1
Crude Oil continues to trade just off the highs of the major price-wedge in between the support at 107.14 and the resistance at 108.23 on the 5400-tick anchor chart.  We have been trading in this range for the majority of the week, and today we will continue to use these support and resistance levels as big clues for price-reversal locations.  We can see a trend moving lower on this anchor chart, with the red cloud and the lower-lows however we will need to see what the current market personality looks like on a faster timeframe before we begin selling short this morning.


Crude Oil anchor chart 2


The same is true on the 1800-tick anchor chart this morning.  We can see very similar examples of support and resistance levels, with some added levels at 106.52, 105.97, 105.20 and 104.74 to use as support for our short trades today.


Crude Oil VIP Chart
Crude Oil is trading in the middle of the range from Wednesday on our 30-minute VIP Chart.  We can see a relatively-average trading-range coming out of London, moving just short of $1.00 from 3am EST.  This trading-range tells us to expect some good trading opportunities this morning because the range will lead to increased volatility for us to use in our trades.

Entry Chart:

Crude Oil Entry Chart
Our 600-tick entry chart shows us an easy clue to get us selling short this morning.  Remember, the anchor charts are showing bearish market sentiment so we look for this bear price-channel to provide resistance at the highs and we will be looking to sell these highs using our wave-pattern-short with a profit-target down at 106.80 later in the session.


Crude Oil PIT Session Levels
Crude Oil PIT Session Price levels show us a nice wide trading range that we will look forward to trading today.



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