May 19, 2011
- in Uncategorized by schooloftrade
Crude Bear Channel earned 60 ticks, and I almost missed it!
825am est
We have crude oil futures rolling forward to the 07-11 contract.
Be sure to follow the specific instructions on the blog regarding how to roll the crude oil forward.
We open our 89-Range chart on CL 07-11 and we see some very important information.
Price wedge and we are at the highs
Sideways Range, with the BMT right in the middle
We have major levels of resistance above us and major levels of support below us.
This information tells us to sell the highs of the wedge, but beware trading right now around the BMT.
One more thing…the Big Round Number of 100.00 is on everyone’s minds, so this will also be a concern.
We’re in a good spot (top of the wedge) but the price levels are making it hard to be confident.
845am est
We now review the dollar index 06-11 DX
We see a strong bull channel on the 89-range chart, which tells us the buyers are in control.
However, the sideways range we see in the white box makes us think…are the sellers trying to grab hold?
Bull channel on the Dollar tells SWING TRADERS to stay net short, but day traders need a little more info.
Lets use a faster timeframe (13range) to see the most important info…what’s happening RIGHT NOW.
Sideways Dollar = No directional bias, so we can trade long or short with the same effectiveness on the markets we trade most.
If you look closely we see higher lows in this sideways range, this may be the most important clue.
Then we notice the lower highs and we think…could this be a dollar wedge?
If this is a wedge we may be in trouble. Dollar wedges are never fun. If the price makes new highs, breaking the wedge, then we know for sure what this market has intended.
Im looking for the dollar to rise, higher lows and inside the major bull channel we expect he dollar to rise.
The HOD on the Dollar will be the next clue…if we break new higher highs and breakout of this wedge now we know what to do next.
Our plan of attack using the dollar:
– Higher highs on the dollar and im selling retracements and selling at resistance on the crude and gold today
– If the dollar reverses at the highs and completes the wedge I will then be extra cautious today b/c of the DX wedge
910am est
We review the Gold Futures and we see a swing trade setting up SHORT on the 89range chart. We can use this as a sign of things to come.
Look for selling retracements when this entry trigger on the swing trade method for Gold.
We see a narrow price wedge, with the BMT in the middle. The BMT will try to pull price back up into this wedge.
We see sideways ranges above us and below us. We will use these ranges to buy at support and sell at resistance.
We’ve marked up the major highs and lows above and below us and we are ready for our day.
Now let’s use a faster timeframe on gold to find the specific price levels to use this morning.
34-range chart on Gold shows me a lot of specific information that we can use to make our plan.
Our plan for trading Gold today:
We are inside a wedge pattern, so we buy the lows, sell the highs and avoid the middle of the wedge.
We are trading inside the range from Wednesday, making this an inside day, which means we use the range we are trading in. Buy the lows, sell the highs, and avoid the middle.
As soon as the price on GC 06-11 breaks the PLOD or the PHOD we then become an outside day.
Outside days tell us the market is changing its personality, its bias, its opinion of value.
We buy pullbacks and sell retracements, we trade breakouts on OUTSIDE DAYS.
Inside day, stay inside the range…outside day…get moving higher or lower!
We also see easy levels of support and resistance from sideways ranges in days prior.
With that said, here’s our plan
If price rises:
– Im selling resistance first, and then buying pullbacks with new higher highs
– I want to buy the lows of the Day, buy the PLOD at 1487.7
– I will avoid trading around the BMT, the OPEN, and the middle of the very narrow price wedge.
– I want to try my best to stay away from that narrowest point of the wedge
– Then sell the highs of the day, sell the PHOD at 99.7 and 98.7
– I will ALWAYS look to sell the PHOD/HOD first, then with new HH’s I look to buy a pullback
– Beware trading around the big round number of 1500.00
– With prices rising more I then sell resistance at 1504.3
If prices fall:
– We buy support levels first, and then sell retracements with new LL’s
– I will buy the PLOD/LOD at 87.7 as support and then sell retracements when we make new LL’s
– Buying support at 84.6, 77.8, the lows of the wedge 1475.0 and the lows of the range at 71.1
– If price keeps dropping im buying support at 1462.5
945am est
The Gold market is our first trade of the morning.
Buying the PLOD/LOD on Gold was very sloppy, but the fact of buying the lows and buying the PLOD made us more confident.
Now the gold is having trouble making new highs. If we cant make these new HH’s we need to watch for new lows and start selling this thing down if we see buyers fail.
955am est
We’re expecting a lot of news at 10am est
Crude Oil is trading around the big round number of 100.00 so we must beware.
We now see a bearish channel on Gold 13-range chart, and this goes hand-in-hand with the double-bottom we also see.
Our goal on the Gold will be to sell at resistance using the 2-bottom and the Bear-channel as our guide.
Crude Oil is still trading in a very high risk area on the 89range chart.
The big round number 100.00, the Big Money Trigger Line, and the sideways range at the highs of the wedge make us concerned that this area is a great spot to sell (top of the wedge) but it’s NOT a very friendly price level.
1000am est
Home Sales are out lower than expected
Philly Fed drops BIG
Leading indicators drop -.2%
The news we see is dollar bearish (should be). Philly Fed is lower, Empire State was lower on Monday and this will drop the dollar, which SHOULD cause the GC and CL to rise.
We will have to wait and see, but this is what the news tells us at this time.
1020am est
We have the Gold sloppy and sideways at the highs of the bear-channel.
We have crude oil suffering from a big round number 100.00 and contract rollover. Crude Oil looks like it may be a while before it gets away from this 100.00 area.
Lets not forget the most important information we need to use:
Gold:
– Bear channel, so sell the highs and buy the lows
– Double bottom at 87.7, so look to sell at resistance
– Its hard to tell where this market is headed, but we know that selling at resistance will be our goal.
– We can sell the 1495.5 overhead or we can sell retracements below 1487.4 LOD
– We need to avoid trading around the BMT and the OPEN on the Gold, so let’s be patient
1045am est
Lets plan our attack on crude oil today:
We the bull-channel from earlier this week has been broken, and we trade sideways in a wedge pattern.
We know there is overhead resistance and suppot below the wedge, so we look to buy the lows and sell the highs.
The 100.00 big round number is still in our way. We have to beware trading around the BRN 100.0
If price drops:
– Buying support as price drops, then selling retracements with new LL’s
– Buying 99.83, 99.57, 99.00
– Avoid the BMT at 99.30
