May 13, 2011
- in Uncategorized by schooloftrade
Price Magnets on Crude make easy Profit Targets
We have lots of 830am news, and we also see CAD news at 830am as well.
We expect CAD news to have a larger impact on crude oil b/c of exports in Canada.
– We are below the PHOD and PLOD, makes this an outside trading day
– This tells us to look to sell retracements and buy pullbacks, this is NOT a range-bound market, this is a breakout market, higher highs and lower lows.
– We located a large trading range from 94.63 up to 104.60 and we are at the lows of this range
– We have a sideways wedge pattern and we are at the lows of the wedge
– We have a bear channel, and we are at the lows of the channel
– My BMT is above me 98.66, which will act like a price magnet
– My OPEN at 12am est is up at 99.58, another magnet for price
– What does all this mean?
– We’re at the lows of the range, the channel, the wedge, and with the BMT and the OPEN above us, these are all signs the price will try to rise.
– We don’t know for sure, but this is our initial assumption.
– We have to go back to the MOST RECENT aspect, and the bear channel reminds us to keep selling retracements until this market tells us differently.
835am est
– Crude oil is rising, we have the highs of the channel and the PLOD at 97.50 which will make for an excellent short entry location.
Lets plan our attack on crude oil:
If price rises:
– Im buying pullbacks, trying to buy the lows of the wedge, the lows of the range
– Im selling the high of the bear channel and the PLOD at 97.50
– If we make new highs above the channel highs and above the PLOD we take that as a bullish sign and we want to buy pullbacks
– We don’t buy the highs, we buy pullbacks.
– Im going to avoid trading around the BMT 98.57, and I will avoid the OPEN 99.58 and the big round number of 100.00
If price falls:
– We are selling retracements as price falls, but keeping a close eye on the lows of the sideways range.
– Buying first as price falls, buying the support, the lows at 94.63
– If we make new lows below .63 we then see this as a strong bearish clue, and we sell retracements.
– We need to get below the 94.63 to really get the best moves down, and beware selling the lows, wait for new lows and then sell a retracement.
900am est
– We’re waiting for the market to grow a personality this morning
– We don’t have any idea WHO controls price right now, so we plan our attack and we wait for price to come to us.
Lets review the gold futures:
– 89 range chart shows a price wedge, sideways range, and major levels above and below
– We see the BMT at 1495.1 is right in the middle of this wedge, so beware trading this area
– We’re at the lows of the wedge, and with the BMT overhead we expect prices to rise.
930am est
– We finally got the trades to make us some profit this morning after 3 swings and 3 misses trying to sell the highs of the channel
– We finally got our winner this morning selling the highs of the channel, but then price action gets sloppy around the 930am OPEN so we took our profit quickly.
950am est
– We have had a great day so far, lots of profit in the account, but certainly not the easiest price action for the big runners
– It seems we have the correct entry and final target, but the crude oil price action is too sloppy to keep us in the trade for very long.
– So lots of +5/-5 and then we finally get the big winner.
– Let’s remember we expect to see the markets slow down into 10am, so lets re-focus our plan of attack and move forward.
Lets plan our attack on Gold:
If price falls:
– Im selling the highs of the price channel below 89.0
– Im buying support at 81.9
– Buying the lows of the wedge at 78.7
– Buying the LOD at 1477.6
– Buy the channel lows at 71.1
– As price falls I’m buying at support first with a 2step price reversal pattern
– If we keep making new lows I will NOT sell the lows I will sell a retracement
If price rises:
– Sell the PLOD as resistance 1495.4
– If we break above the PLOD I will then buy a pullback this is a very highs % trade long > PLOD
– I need to avoid the BMT 1498.8, and the big round number 1500.00, and the OPEN 1504.5
– Sell the HOD at 1505.8
– Sell resistance at 1510.9, 1515.0,
– Sell the highs of the wedge and the lows of the bull channel at 1517.3
–
1010am est
– Our assumption was correct that we would need to take our money from the market early today and now at 10am the personality slows WAY DOWN and we listen to the market for new clues.
– Let’s be careful here, this may take 15 minutes to find its new direction.
1050am est
– We’ve been working hard to pick up on clues after the market lost its direction at 10am
– Its been very tough to determine WHO is control
1100am est
– We are waiting for the end of the morning move, and we expect it will be to the upside. (based on the info we got earlier this morning (BMT/OPEN/Lows)
– Buy pullbacks if price heads to the highs of the channel
– Final target will be easy 99.00 but price action may be tough
– Lets wait and see where we go at 1130am
1145am est
– We got the late morning move
– Exactly as we expected, and hit the 99.00 on the nose.
– We skipped the first trade to see ‘proof’ of the move after the 1130am European close
– Took the 2nd and 3rd trades, and missed the 4th.
– Price was very sloppy, making it hard to stay in the trades as it rises to the highs of the channel
– Another good day in the books!
