Tuesday, March 4, 2014

Day Trading Crude Oil, Gold, E-Mini | SchoolOfTrade Newsletter 03/04/14

You can fool all the people some of the time, and some of the people all the time, but you cannot fool all the people all the time. – Abraham Lincoln

Reflections from Today:

·       Today’s Trades:
o   Crude Oil:  Sell < 104.06, profit-target @ 103.11
o   Gold:  Sell < 1342.0, Profit-target @ 1337.2
o   Mini-Russell:  Buy > 1179.2 for BIG Winner
·       Markets Today:
o   Crude Oil: 211ticks (-1.46%) @ 103.33
o   Gold: 217ticks (-1.18%) @ 1334.4
o   Mini-Russell: 367ticks (+2.51%) @ 1205.2
·       News Today:
o   No Major Economic News today
o   Equity Markets hit another all-time high
§  US threatens sanctions, Russia threatens to drop the Dollar & wont repay loans in USD
o   Ben Bernanke quoted today, “households have recovered from the crisis”
o   Crude Oil API# +1.2M (2nd straight weekly build)
·       This Day In History:
o   Mar 4, 1472:  The world’s oldest operating bank, the Monte della Pieta, is founded in Siena, Italy to lend money to “poor or wretched or needy persons” at 7.5% annual interest. Today the Monte dei Paschi, still headquartered in the same building, is one of the largest banks in Italy.
o   Mar 4, 1789:  The Constitution of the United States goes into effect
o   Mar 4, 1791:  Vermont becomes the 14th state of the USA.  Almost 200-years later, their greatest export, Ben & Jerry’s Ice Cream, hits store shelves for the first time.
o   Mar 4, 1861:  Abraham Lincoln was inaugurated as President
o   Mar 4, 1933:  Franklin Delano Roosevelt is inaugurated as the 32nd president of the United States, at the height of the Great Depression.  In his famous inaugural address, delivered outside the east wing of the U.S. Capitol, Roosevelt outlined his "New Deal"--an expansion of the federal government as an instrument of employment opportunity and welfare--and told Americans that "the only thing we have to fear is fear itself."
o   Mar 4, 1957:  Standard & Poor's Corp. introduces a new stock index, which it initially calls the "Standard '500' Index." Now known as the S&P 500, the index uses a "scientific weighting formula" that enables investors to measure the movement in the total value of most of America's major stocks. 
·       News Tomorrow
o   8:45pm EST: (CN) PMI Composite
o   4:00am EST: (EUR) PMI Composite
o   5:00am EST: (EUR) GDP
o   8:15am EST: (US) ADP Employment Report
o   10:00am EST: (CAD) Bank of Canada Announcement
o   10:00am EST: (US) ISM Non-Manufacturing
o   10:30am EST: (US) Crude Oil Inventories
o   2:00pm EST:  (US) Beige Book

Economic News for Tomorrow:

We have a lot of Red-Star News on the schedule for this evening and tomorrow so we will be looking forward to many trading opportunities starting this evening.

Today's Economic News
The most important thing we need to be prepared for tomorrow (for Crude Oil traders) is news the Inventory news at 10:30am EST.

Remember to sit-on-hands 15-minutes before the report comes out, and again 15-minutes after the report is released before taking your first trade. 

I know this is hard, because we often think we know exactly where the price-action is going to move after the news comes out, but a wise trader never predicts, we only react, so we wait patiently for 15-minutes after the news and then place our trades based on the new market-personality at 10:45am EST.

Later in the morning we need to beware the price-action may slow down after 11:00am EST as traders likely go to lunch a bit earlier than normal because we have important news @ 2:00pm EST from the Fed’s Beige Book.

o   8:45pm EST: (CN)   PMI Composite
o   4:00am EST: (EUR) PMI Composite
o   5:00am EST: (EUR) GDP
o   8:15am EST: (US)   ADP Employment Report
o   10:00am: (CAD)       Bank of Canada Announcement
o   10:00am EST: (US) ISM Non-Manufacturing
o   10:30am EST: (US) Crude Oil Inventories
o   2:00pm EST:  (US)   Beige Book

Day trading plan for Tomorrow:

Crude Oil:

Crude Oil VIP Chart
Crude Oil moved lower overnight after news was released from Russia that eased tension over the situation in Ukraine.  Crude Oil opened right at Monday’s lows (103.97) but pushed lower from there.

Crude Oil 34 Anchor Chart
Crude Oil is sitting at the LOWS of a bullish price channel on the 21 anchor chart (103.12), which tells us that this drop from 105.00 may be over for now…BUT…if they slip below 102.62 we should easily see Crude Oil push lower to test the 101.92 and possibly down to 101.02.

Crude Oil 21 Anchor Chart

If you’re looking for selling opportunities on Crude Oil you came to the right place.  The 13-anchor chart shows us a bearish price channel which tells us it is time to look for selling opportunities this evening.

Crude Oil 13 Anchor Chart
My plan for Crude Oil is to sell short at 103.74 or 104.04 with a profit-target below at 102.62, 102.33 and 101.92 on the way down.


Gold VIP Chart
Gold was another big-mover in today’s trading session, moving lower overnight and staying below the highs from last week at 1343.6.  We saw a narrow trading-range today on our VIP Chart, which tells us that Wednesday is likely to be a VERY wide range type of trading session.

Gold 34 Anchor Chart
Gold appears to be ‘hung-up’ at this support zone on the 21-anchor chart around the 1337.2 area, but if we can push below the 1332.9 we should be able to test the lows of this bullish price channel and we would LOVE to buy the lows of this price channel at 1326.9 on the way back higher going into Friday’s Non-Farm Payroll report.

Gold 21 Anchor Chart
The 13-anchor chart of Gold shows us trading lower, inside a bearish price channel and just recently we had an excellent selling opportunity at the highs of the price channel around 1340.0 with a profit-target below us at 1333.3.

Gold 13 Anchor Chart
My plan for Gold is to look for selling opportunities at the highs of the bearish price channel on the 13-anchor, and make sure I use the profit-target at 1327.5 below us because that puts us at the lows of the bullish price channel on the 21-anchor chart.


The Mini-Russell was the BIG mover in today’s session, cruising to new all-time-highs and most importantly staying ABOVE the big-round-number of 1200.0 the very first time it tested that level in its HISTORY.  The E-mini S&P did something similar today, but could NOT hold above it into the closing-bell like the Mini-Russell was able to.

Last night on our Newsletter we gave you guidance to look for buying opportunities above the 1187.0 area, and that is EXACTLY what we did today in our Live Trade Room.

Russell VIP Chart
The VIP Chart of the Mini-Russell shows a gap UP this morning, followed by tremendous buyer-strength which immediately had us preparing for a profit-target at the 1200.0 big-round-number.  The AMAZING part today was that the Mini-Russell passed the 1200 and pushed all the way to the 1212.50 which was an incredible run up on the day!

Russell 34 Anchor Chart
The 34-anchor chart of the Mini-Russell shows us trading at the highs of this bullish price channel, with another projected profit-target even hhigher at the 1227.0 level.  This area on the anchor chart must be treated as resistance, so this evening we can expect to see some profit-taking and price-action is expected to pullback a little before we go into Wednesday.

Russell 21 Anchor Chart
The 21-anchor chart of the Mini-Russell shows us trading at the highs of the bullish price channel; however, we can now also see 2 buy-zones well-below us this evening at 1187.3 and 1172.9.

We expect to see price-action come off these fresh all-time highs this evening and into tomorrow and we will look for selling opportunities as price-action moves lower with a profit-target down at 1187.3.

Russell 13 Anchor Chart
The 13-anchor chart of the Mini-Russell shows us some very important information this evening, specifically where we can look for selling opportunities if we want to get short this evening or tomorrow morning.

Look for a selling opportunity below the zone at 1202.0, and use the levels at 1194.6 and 1187.3 as your profit-targets on the way lower.

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