Tuesday, February 18, 2014

Weather & Poor Economic News send markets higher | SchoolOfTrade Newsletter 02/18/14

“Genius is 1% inspiration and 99% perspiration.”

Reflections from Today:
·       Crude Oil; +236ticks @ 102.61
·       Crude Oil keeps pushing higher w/ high volume (cold weather)
·       Gold; +201ticks @ 1322.2
·       Gold pushes higher on poor economic news (bad weather)
·       Mini-Russell; +176ticks @ 1158.7
·       Equities continue to find strength…shocker!
·       Empire State Manuf Index; Big drop in ‘New Order’s
·       NAHB Housing Market Index; largest EVER M/M decline
·       OPEX Week:  3rd Friday of the month
·       Contract Rollover on Crude Oil Futures (04-14)
·       Feb 18, 1885; Mark Twain Publishes ‘The Adventures of Huckleberry Finn
·       Feb 18, 1688; London Gazette publishes ‘Edward Lloyds Coffee House’ the birthplace of Lloyds of London and the Insurance Industry
·       Feb 18, 1700; Daniel Bernoulli, the father of Probability Theory and Risk Analysis born.
·       Wednesday:  Housing Starts, Producer Prices, FOMC Minutes
·       FYI:  Crude Oil Inventories Thursday @ 11am EST (Monday Holiday)

Economic News for Tomorrow:

Economic News Tomorrow
Tomorrow, Wednesday is the beginning of Options Expiration Week for us day traders because it is the first day of OPEX-Week that we start to see the impact of volume entering and exiting the market ahead of expiration deadline at the end of the day on Friday.

Tomorrow morning we begin right out the gate with major Red-Star News at 8:30am EST from Housing Starts and Producer Prices.  Remember, this is RED STAR NEWS which means we are looking for lots of trading opportunities to follow this news along with big runner profit-targets and potentially a very big range day.

Later tomorrow afternoon we have the FOMC Meeting Minutes, which are almost a month old, however, we will have to beware trading directly into the 2:00pm release of this report, but we won’t use the report for very much because it is month-old news.
No matter WHAT happens with the news… tomorrow is going to be a very active day with Wacky Wednesday on our hands!

All Day:                     Wacky Wednesday
8:30am EST:             Housing Starts
8:30am EST:             Producer Price Index
2:00pm EST:             FOMC Meeting Minutes

Day trading plan for Tomorrow:

Crude Oil:

VIP Chart:
Crude Oil VIP Chart
Crude Oil looks very bullish at first glance on this evening’s VIP chart, but after further analysis we can see that the closing-print at the highs was NOT supported by the volume-print at the lows of today’s range.  This is a possible clue for a price-reversal going into tomorrow, but as always, we never want to predict, we only will react if prices try to push higher and fail…we will know exactly why.

My plan for Crude Oil trading on Wednesday is to look for buying opportunities above the 102.19 and selling opportunities below 100.92.

Anchor Chart:
Crude Oil 34-Anchor Chart
Crude Oil pushed all the way up to the mid-point of the larger trading-range from middle of 2013 and you can see on the 34-anchor chart that we trading directly into some major resistance zones overhead at 104.33 down to 101.79.  Has Crude Oil seen its final bullish move this week?  Will the resistance hold and prices fall back to the big-round-number at 100.00?  We will have to wait and see!

Crude Oil 21-Anchor Chart
The 21-anchor chart of Crude Oil shows us trading up near the highs of this short term bullish price channel.  This is a very important clue because it shows us that we do indeed still have room to run higher all the way to the top of this price channel which puts us up around the 103.00 – 103.50 area on this anchor chart.  We look VERY over-bought on this anchor chart.

Crude Oil 13-Anchor Chart
The 13-anchor chart of Crude Oil shows us a lot more useful details this evening.  We can easily see how over-bought Crude Oil is right now…which means I am going to wait for price to pull back off these highs and try to get into a buying opportunity around the 101.79 or 101.29 zones below us this evening and into tomorrow.  Notice, if we get below the prior week highs at 101.09 we may have a big selloff on our hands as we go lower back to the 100.00 big-round-number.

My plan on Crude Oil is to wait patiently for price-action to pull back off these highs and I am looking for buying opportunities at 101.79, 101.58, 101.29, and 101.12


VIP Chart:
Gold VIP Chart
This gold VIP chart makes me want to wear a HELMET tomorrow when we trade in our Live Trade Room, hehe, this price-action has been all over the place and I LOVE IT!  Notice the volume-print up near the highs of today’s range, which is the biggest bullish clue we get from this chart.

My plan on Gold is to look for buying opportunities above the 1329.3, and selling opportunities below the 1317.0 to fill the GAP we have below us.

Anchor Chart:
Gold 34-Anchor Chart
Gold has made a great run higher over the last 2 months, and now we find gold trying to push through the sell-zone overhead at 1328.6 up to 1347.3 on our 34-anchor chart.  We can also see that Gold is VERY over-bought this evening and we could find some excellent buying opportunities if we could get a pullback to the 1300.0 area on the chart.

Gold 21-Anchor Chart
The 21-anchor chart of Gold shows us a very strong bullish price channel and price-action is currently trading right near the highs as we test the sell-zone above at 1328.6.  Notice, we are at the highs of the price channel, and we have a LOT of room to pullback before we get back in balance.  This anchor chart tells us to stay patient and wait for prices to pullback for the easiest way to make profit following this trend.

Gold 13-Anchor Chart
The 13-anchor chart shows us the most detail of the short-term trend and most importantly it tells us that we need to stay away from trading this area right now.  Not only are we over-bought on the prior anchor charts, now we see that price-action is struggling to get away from last week’s highs at 1321.5.  We don’t like trading around the ‘dotted lines’ you see on this anchor chart, so this anchor chart tells us to sit-on-hands and wait for tomorrows opening-bell.

My plan on Gold is to sit-on-hands overnight, or at the very least im waiting to get away from this prior week highs.  I will buy the zone at 1309.3 below me, or sell the zone at 1328.1 above me…but remember…stay patient because this whole area is toxic for day trading.


VIP Chart:
Russell VIP Chart
The Mini-Russell (along with the other equity markets) are very bullish right now going into OPEX week here in the US.  This VIP chart shows us BIG CLUES that the buyers took control and never looked back today.  Notice, the volume-print near the highs of the range, suggesting that the most interest today (as well as last Friday I might add) was right at the highs of the range.

My plan for the Mini-Russell is to look for buying opportunities above the 1160.7 or selling opportunities below the 1146.6 because we have a big wide-open-space below us from 1146.6 down to 1119.2

Anchor Chart:
Russell 34-Anchor Chart
The Mini-Russell, just like the others this evening, shows us a major sell-zone directly overhead on the 34-anchor chart.  In addition to being on top of this resistance level we can also see that we are well over-bought at this time, which suggests that it would be best to look for buying opportunities after we see a pullback overnight.

Russell 21-Anchor Chart
The 21-anchor chart shows us more bullish clues this evening with a strong bullish price channel and trading right at the highs.  This chart tells us once again that price-action is over-bought and our best option would be to buy it after we pullback off these highs.  I would LOVE to buy the lows of this bullish price channel if price-action can test the lows around the 1145.0 area this evening or tomorrow.

Russell 13-Anchor Chart
The 13-anchor chart shows us exactly where we want to buy the Mini-Russell this evening and into tomorrow.  We can see buy-zones at 1154.0 and 1150.2 so we have an easy target to look for our next buying opportunity.  I’ve provided profit-targets overhead at 1162.1, 1166.1 and 1169.5, not to mention the highs of the bullish price channel which may be a little higher/lower depending on how long it takes to test those highs.

My plan on the Mini-Russell is to buy on a pullback to the 1154.0 or 1150.2 levels below us this evening and into tomorrow.  With a buying opportunity tomorrow I am looking for profit-targets at 1162.1 and 1166.1 for the easy money!

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  1. Maybe it's just my cpu but I can't see the video, only audio.

    1. Im sorry Kim! Please re-load the page and you will see the video has loaded. Sorry! and THANK YOU for watching!


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