Friday, September 6, 2013

Crude Oil Day trading strategy; Morning Prep 09/06/13

7:30am EST

News coming out of London Overnight:
Global markets are anxious to hear from the US Jobs Report this morning at 8:30am EST, with most markets trading at highs today in very narrow trading-ranges.

We continue to hear news chatter about Syria, and the ‘soap opera’ will most likely continue into next week.

Focal Points this morning:
·       Trading is cautious this morning ahead of today’s 8:30am EST Non-Farm Payroll news report.
·       Global markets making new higher-highs this morning with Crude Oil up $.23 and the E-Mini S&P up .03% ahead of today’s Non-Farm Payroll News in the US
·       More positive news from the ECB, this time from Greece with outperforming Q2 GDP.   

Crude Oil News

Economic News on the schedule today:
8:30am EST              Non-Farm Payroll News

Crude Oil Analysis:
Crude Oil Anchor Chart 1
Crude Oil is trading higher this morning, with our anchor charts all showing bullish market sentiment and a clear level of confidence ahead of today’s big news report at 830am EST.

We can see a short term price-channel on the 1800-tick chart and a profit-target up around 110.50 for us to take profit after using our wave-pattern-long to buy on the way up.

Crude Oil Anchor Chart 2
Our 30-minute VIP chart shows us trading at the PHOD this morning and a very narrow trading-range coming out of London.  These are two very important clues that we will use this morning.

Crude Oil VIP Chart
First, trading at the PHOD suggests the buyers see value in prices above the highs from yesterday.  We don’t always know WHY these buyers are pushing higher, but the fact of the matter is the PHOD is a clear signal that the market sentiment is bullish this morning.  If we break and close above the PHOD on the 5m chart we will consider buying pullbacks up to a profit-target at 110.07. 

We will also keep a close eye on the fake-out-breakout around the PHOD.  With today’s Non-Farm Payroll news at 830am EST we may see a sharp price-reversal after that news is released and we may be selling short back below the PHOD with a profit-target at the trend-line support and a runner at the PLOD of 107.13.

Second, we see a narrow trading-range coming out of London, which is not very typical, and it makes us think about what the markets may be ‘waiting for’ this morning ahead of the opening-bell.  We typically see a $1.00 trading-range from London and this morning we have less than $0.75 of a move which suggests the markets are waiting on something later this morning.  We can assume the Non-Farm Payroll news report coming out later this morning is what people are waiting for.

Our day trading plan this morning will be to trade with the current bullish trend, buying with the Wave pattern on the way up to 110.07 and beyond.

Crude Oil PIT Session Levels

Beware, today is a day that many professional traders watch from the sidelines.  Similar to an FOMC Day, or OPEX-Friday, today is going to be much different price-action than we normally see. 

It’s difficult to predict where we are going ahead of this Non-Farm Payroll news at 8:30am EST, but one thing is for certain, we must stay patient to wait for this news to be released and then ‘digested’ by the market before we go entering into trades.

Marty's Crude Oil PIT Direction
The most important thing to remember this morning is to wait for at least 10-minutes after the news is released to let the market make ‘sense’ of the report.  Don’t rush into the markets today, wait for the clear new short-term trend after 8:30am EST and trade in that direction.

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