Crude Oil Day trading strategy; Morning Prep Screen to Floor 08/05/13

Economic News Worksheet

Marty's PIT Session Levels

Crude Oil Anchor Chart:

Crude Oil Anchor Chart

Crude Oil prices have been trading lower since the first of August after hitting fresh highs at 108.93.  we can see as price-action moves lower that we have 2 support zones below us at 105.75 and 103.99.  With the open space below us we can assume prices will move lower until we see a test of the first support at 105.75. 

Our day trading plan will be to trade short with this anchor chart moving lower this morning, however, we will need to get into the short trades BEFORE we run into 105.75.  If we drop below 105.75 we will also be able to resume selling short down to 105.02 as well this morning.

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Crude Oil 5-Minute:

Crude Oil 5-Minute

The 5-minute anchor chart shows us some important information this morning.  First, we can see price-action has traded below Friday’s PLOD at 106.45 and our next PLOD is down at 105.32.  We can assume price-action is going to try and test that low from last Thursday so look for short-selling opportunities down to 105.32.  If/when we test the 105.32 we can then look for a price-reversal set-up or continued selling below the 105.32.  We will have to wait and see the reaction around the lows from Thursday before we can make a decision on what to do at that level.

Another clue we see on this chart is the WIDE trading-range coming out of the London trading Session.  We like to see decent-sized trading-ranges after 7am EST from overnight, and this morning we can see a wide range for us to expect move wide ranges in today’s trading session.

Crude Oil Set-up:

Crude Oil Entry Chart

The 610-tick chart shows us that we are indeed in a position for selling-opportunities right now. 

We can see the short-term trend went sideways over the last few hours but recently made new lower-lows in the price-action which tells us the sellers have taken control over the price-action and we want to trade along with them.

The fastest timeframes tell us to look for entry patterns to get into short positions at this time, remembering to use the profit-targets we identified on our anchor charts posted above.

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