Wednesday, October 1, 2014

Which way for Thursday? | SchoolOfTrade Newsletter 10/01/14




“Be patient with yourself. Self-growth is tender; it’s holy ground. There’s no greater investment.” –Stephen Covey
Notes for Tonight’s Newsletter:
·       Markets continue to provide plenty of high-percentage trading opportunities as we kick-start the first day of October!
·       Gold trading @ 1213.0 inside the price wedge on our anchor chart as investor take ‘shelter’ from the global un-certainty.
·       Mini-Russell continues to push lower, attempting to test the May 15th lows at 1069.4 as sellers take profit off all-time highs.
·       Crude Oil collapsed off the highs for the 2nd day in a row, moving back to the lows from early last week @ $91.00/barrel.
·       ECB News tomorrow @ 7:45am EST, Press Conference @ 8:15am EST
·       US Non-Farm Payroll Report on Friday @ 8:30am EST.  Today’s ADP Report gives insight into a stronger-than-expected jobs report on Friday.


Gold:
·       Fundamental:  Gold pushed higher today on fresh violence in Ukraine and uncertainty about the bond market in the US now that the manufacturing news has been bearish this week and, of course, Bill Gross left PIMCO which has shaken-up the markets and caused buyers enter the shelter-market of Gold futures.  Today the Dollar-index did NOT make new highs, which is why Gold continued to sit above $1200/oz.
·       Technical: Gold is trading sideways/consolidating just above the key level of $1,200/oz.  We have identified the highs and lows of this trading-range and will look to avoid the middle, sell the highs, and buy the lows until this consolidating range is broken and confirmed with a new direction.

Crude Oil:
·       Fundamental:  Traders are concerned about the demand of Crude Oil because China’s economy is slowing down, Europe is one bad month away from another recession, the US Manufacturing numbers came in softer-than-expected this week, and don’t forget that world travel has basically stopped because of the recent Ebola virus scare.  All of these are fundamental reasons why prices of Crude Oil Futures are falling.
·       Technical: Crude Oil collapsed over $3.00 off the range-highs on Monday, and today the price-action rallied after the 10:30am EST Inventory report before collapsing once AGAIN and finished down at our profit-target at 90.44 for the session.  We didn’t see a new lower-low today so we need to sell the HIGHS of the range if we want to ‘get short’.  New lower-lows tomorrow below 89.23 will unlock new sell-zones but for now we are focused on selling the zones above us at 91.72, 92.43, 92.88 and 94.04.

Mini-Russell:
·       Fundamental:  Concerns about the global economy are weighing on stock indexes; Ebola outbreak, violence in the Middle East, un-easy conditions in Ukraine, and the protests in Hong Kong is giving investors reason to take money from stocks and buy bonds in the US.

·       Technical:  Mini-Russell keeps pushing lower, moving well-below the big-round-number at $1100.00 and headed towards the May 15th lows of 1069.4.  We have the next support level at 1074.9 and selling opportunities overhead at 1097.4 from our 64-anchor chart.

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