Monday, February 10, 2014

3 Reasons to Expect BIG MOVES This Week | SchoolOfTrade Newsletter 02/10/14

“I discovered a long time ago that if I helped people get what they wanted, I would always get what I wanted and I would never have to worry.”

Reflections from Today:
·       Markets quiet today (6% below avg. volume);
·       Monday with no economic news
·       Monday after Non-Farm Payroll
·       Crude Oil traded 144 ticks; ended flat @ 100.00
·       Gold went traded 98 ticks; ended flat @ 1274.7
·       Mini-Russell traded 121 ticks; ended higher .27% @ 1116.1
·       Feb 10, 1996; Kasparov loses chess game to a computer!
·       Feb 10, 1990; Nelson Mandela Released from prison
·       Feb 10, 1938; “Fannie Mae” is born, our favorite GSE!
·       Tuesday’s News; nothing on the calendar, more of the same?
·       Janet Yellen makes her debut; speaking in the House Tomorrow
·       Gold and Crude Oil both pushing higher, “something’s gotta give”

Economic News for Tomorrow:



Tuesday's News
Tuesday is another day this week without any major economic news on the calendar, with the exception of Janet Yellen’s debut speaking in the House for the first time as our new Fed Chairperson.

Whenever we have a day without news we always need to patient at the beginning of the morning to make sure the market-personality is consistent and that we have a trend that we can follow for the easy profits.

If tomorrow opens slow and sluggish like Monday’s opening-bell, we need to remember the CLUES we saw today and stick to our game plan on a day without any market-personality.

Day trading plan for Tomorrow:

Crude Oil:

VIP Chart:

Crude Oil VIP Chart
Crude Oil traded sideways this morning in a very narrow trading-range almost exactly on top of the 100.00 big-round-number.  The volume profile from today shows us completely ‘balanced’ right in the middle of the range and exactly at 100.00.  This tells us that we don’t have any directional clues…all we know is that a narrow trading-range like this can’t keep up forever, so we will be waiting for the breakout tomorrow morning.

I’m buying tomorrow with an opening-print above 100.55, and selling with the opening-bell below 99.54.

Anchor Chart:

Crude Oil Anchor Chart 34
The 34 anchor chart on Crude Oil shows us trading inside a massive bullish price channel with a major resistance levels overhead at 100.86, 102.18, and 104.70. We can use these levels for profit-targets as we push higher into the middle of the week.


Crude Oil Anchor Chart 21
The 21 Anchor chart of Crude Oil shows us running into resistance at 100.41 and 100.60 and we can also see that price-action is trading at the weekly highs from last week.  These clues tell us that buying HERE isn’t wise, and we will wait to buy on a pullback so that we can buy at a discount.


Crude Oil Anchor Chart 13
The 13 Anchor chart shows us the most useful clues this evening.  We can see that price-action moved above Friday’s highs at 100.41 and then backed-off those highs and finished the day at the 100.00 big-round-number.


My plan is to look for buying opportunities at the support levels below us around 99.83 and 99.42, however, if we make it below the 99.27 then I am looking for selling opportunities all the way back down to the price channel lows around 98.00.

Gold:

VIP Chart:

Gold VIP Chart
Gold traded in an incredibly-narrow trading-range on Monday after we had a big GAP-UP from last Friday’s closing-print at 1262.9.  As you can see, we have a HUGE gap that needs to be filled, which is exactly why we are so excited to go into tomorrow and Wednesday.  This narrow trading-range tells us something BIG is likely on the horizon, so we are getting ready for ANYTHING as this week develops.

My plan on Tuesday is to look for buying opportunities above the 1277.8 with a target up at 1295 and also look for selling opportunities if we see an opening-print tomorrow morning below 1272.0 and a profit-target on that at 1262.9 and again at last Friday’s LOD at 1255.5.

Anchor Chart:

Gold Anchor Chart 34
Just like Crude Oil, Gold is also in a massive bullish price channel right now and banging its head again the resistance at 1275.2.  You can see on the 34 anchor chart of Gold that we have tried now three (3) times to push above the 1277.0 without any success.



Gold Anchor Chart 21
The 21 Anchor chart of Gold shows us the resistance at 1275.4 that has been spoiling the fun for the buyers.  We can also see easy profit-targets above us at 1281.9 and 1291.4 if we can happen to break above the resistance and move higher. 


Gold Anchor Chart 13
The 13 anchor chart of Gold gives us the most detail this evening and we will use these support levels below us to look for buying opportunities because the trend is clearly moving higher.  We can see this price wedge (triangle) on the chart which tells us that SOMETHING big is likely around the corner, however, we can also see that previous week’s highs at 1274.0 have been spoiling the fun for the buyers… something must give!

My plan for Tuesday is to look for buying opportunities at 1272.5 and 1269.5 on the way higher to the 1279.6, 1281.9 and 1285.0 profit-target overhead.

Mini-Russell:

VIP Chart:

Russell VIP Chart
The Mini-Russell was the biggest mover of the session on Monday, which doesn't say much, but it’s the only market of the three that actually gave us a closing-print that wasn't exactly where we started today.



This narrow trading-range tells me to look for a BIG range tomorrow filled with trading opportunities.  The Closing-print at the highs of the range tells me the buyers never let go of control, and tomorrow we will look for the opening-bell above 1116.2 to look for buying opportunities or below 1104.7 for selling opportunities.

Anchor Chart:

Russell Anchor Chart 34
The 34 anchor chart of the Mini-Russell shows us that we have definitely made a bottom at the support zone around 1090.6 and now we’re headed higher up to the next resistance zone at 1129.7 and then again up to 1159.2.


Russell Anchor Chart 21
The 21 anchor chart of the Mini-Russell we see a new bullish trend has developed on our way back up to the previous week’s highs at 1131.7 and the sell-zone at 1129.7.  Look closely and you will see that price-action is trading at a premium, so we want to stay patient to buy this at a discount, or buying on a pullback.

Russell Anchor Chart 13
The 13 anchor chart of Mini-Russell looks VERY bullish this evening; however we have to be patient not to buy this market at these highs.  I can see an easy location to buy on a pullback around 1110.8 and again at 1107.3.  Watch out if we get below that 1106.1 because that will be the last chance for the buyers to keep control over this price. 


I will start selling below 1106.1, but I’m looking to buy at these support zones as well on our way to the profit-targets at 1118.4, 1122.1, and 1126.9.

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