July 27, 2011
- in Uncategorized by schooloftrade
Trade through sloppy price action, follow this simple plan day trading crude oil
815am
we prepare for the 830am news by reviewing our plan of attack this morning.
We have the 3 Phases of crude oil today:
· Pre-News = 830-1000
· During News = 1000-1035
· Post-News = 1035 – 1230 (today 1100 summer)
We will look for volume to slow down after 11am this morning ahead of the Beige Book news at 200pm this afternoon, so watch the clock.
830am est
The US Dollar Index short term trend is sideways, with a slightly bullish tone to it.
The 13range shows the sideways trading range and we are at the highs. we know the new highs on the dollar will give us new lows on gold, crude, euro, russell, etc.
Clue #1 comes from the dollar index, we have a slightly bullish tone as we come off the lows from overnight.
Crude Oil futures are trading in a bullish price channel and we want to wait for buying opportunities at levels of support.
Our plan of attack on crude oil:
· if price rises im avoiding the 100.00 no trade zone
· i will buy pullbacks above the 100.15 and look to sell at overhead resistance at 100.20, 100.62
· if price falls im buying at the lows of the channel 97.75, 97.21
· The BMT will be a price magnet, so use that as a final target, and avoid entering a trade around the 97.15-97.00
· Also avoid the yellow trend lines around 98.30-98.20
· inside day means we buy the lows and sell the highs and expect price to go from top to bottom.
· bearish price channel in the short term
· Sell Retracements if we break the PLOD, buy Pullbacks above the PHOD
830am Durable goods come out lower than expected, this is US Dollar Bearish, which will be gold bullish and crude bearish.
* we will use this later today for crude oil inventories, now we know the markets have less demand for crude oil.
900am est
We have a very sloppy market around the 89range price wedge lows
We are inside a bear price channel, inside day, and 98.00 is our short term profit target.
We want to sell the resistance levels as price rises.
Sell channel highs, sell range highs
930am est
We have the markets opening with gold at new highs and crude oil pushing off the highs from last night.
We had bearish 830am news, and we wait for 1030am news coming out next.
Gold is outside day above the PHOD so we want to buy pullbacks, however, doing this at the all time highs is a major concern, so we have to be careful. We would rather sell the highs, so be selective if price keeps rising.
The best trades on gold today will be as price drops we can buy at support.
1125am est
we’ve had a challenging day, but we stayed focused on following the plan and eventually the trades made us money today.
· Almost everyone made profit along with us, and now we plan the rest of our morning.
· Trade short on crude below the PLOD 97.76
· Buy the major support at 97.37 if price drops
· Sell the highs of the range at 98.43 on crude oil
Gold we can buy the lows of the channel, but the price action is still very sloppy.
