March 2, 2011
- in Uncategorized by schooloftrade
Day Trading Morning Prep Gold, Crude Oil, Dollar Index, Euro, E-mini Russell Futures
‘We are what we repeatedly do. Excellence, therefore, is not an act, but a habit’ – Aristotle
Let’s begin our morning routine with the economic news for today’s trading session.
8:15 ADP Employment Report
8:20 Gold & Currencies OPEN
9:00 Crude Oil OPEN
9:30 US Market OPEN
10:00 Ben Bernanke Speaks
10:30 Crude Oil Inventories
11:00 Transition into Lunch
11:30 European Close / Live Webinar in our Trade Room
Looking at today’s news we can recal what happened on Monday. The markets waited to see what Bernanke had to say on Monday, so we will expect the same today.
Keeping a close eye on crude oil futures because we have inventories at 1030am today, and we may see some great moves after the 815am news about Jobs.
Lets look at the markets we trade most…
The Dollar Index has been giving us the best clues for what to expect in these markets, and today is a great example.
Sideways, slow and indecisive is what we see on the dollar, which will likely result in similar price action on the markets we trade such as crude oil, gold, euro and more.
If the dollar breaks the support of 76.765 we can expect to see buying opportunities, and if we break above 77.000 we will look to be sellers at levels of resistance.
Its important to remember that simple Dollar Index Futures Correlation when using the DX to make trading decisions.
We will watch the dollar index all day today
Crude Oil Futures
Crude Oil, following the dollar’s lead, is trading with higher lows and lower highs going into this 2nd day of March.
we will focus on three things on crude oil:
- Wedge Pattern n yellow trend lines
- Sideways trading range
- Previous HOD and Previous LOD
Im looking at the Wedge Pattern first because that will be where support and resistance plays in first. We want to buy the lows and sell the highs of the wedge, however, this is a VERY narrow wedge so the best way to trade it is NOT to. Lets wait for price to breakout of the wedge.
We dont want to fall victim to a Fake-out breakout from the wedge, so use pullbacks at the highs and retracements at the Lows.
Next we look at the sideways market from 100.50 down to 99.21. Trading sideways markets are easy…Buy the lows, sell the highs, and avoid the middle.
Im looking to sell 100.50 and looking to buy 99.21.
If price breaks above 100.50 im looking for a failure first, and then look to Buy a Pullback at support
If price breaks below 99.21 im looking for a failure first, and then look to Sell a Retracement at resistance.
Next, lets recal the Previous Highs and Lows from Monday’s trading session. 100.69 and 96.82. These levels will act like magnets and I will be a buyer first if price drops, and a seller first if price rises into resistance.
also notice we are trading INSIDE the trading range from MOnday, this further confirms our concerns about a sideways and indecisive market this morning.
Gold has broken new highs, exceeded the swing high from months ago, and creating a transitional area on the gold 34range chart.
we see three things to watch:
- Price Chanel
- Sideways Range
- Previous HOD and Previous LOD
We’ve broken above the highs of the price channel, and we expect to see price ATTEMPT to go back down in. Looking to sell the break below 1423.5, which gets us into the channel, and below the yellow trend lines.
Use the sideways range we’ve developed to buy the lows and sell the highs. We expect the gold to sit inside this range until it proves us otherwise.
Sell 1435.6, buy the lows of support at 1428.2.
If price breaks new highs I will Buy a Pullback at support
If price breaks new lows I will Sell a Retracement at resistance
Lastly, dont forget about the PHOD and PLOD, price will be drawn to these levels like a magnet. Sell the PHOD as resistance first, and then if we break above the PHOD im going to buy a pullback.
Im going to buy the PLOD, but if we break new lows below i will sell a retracement.
Remember this key rule: If price falls, im a buyers first, seller second. If price rises im a seller first, a buyer second.
We see the dollar index has had its effect on the euro this morning. Double tops on the euro match double bottoms on the dollar, so lets watch the DX for clues on day trading the euro.First thing we see is the major resistance at 3853, we want to sell this area first, and then look to buy a pullback if we break new highs.
Next we need to worry about the price channel, looking to buy at support at the lows of the channel, 3742 is a perfect buying area for this channel.
If price keeps dropping we want to buy at support of 3742, 3710, 3700, 3632 all the way down.
Im going to be a buyer first as price drops to support levels on the way down.
