Crude Oil Day trading strategy; Screen to Floor Morning Prep

Crude Oil Anchor Chart

Crude Oil pushed higher overnight, moving back above the 107.00 big-round-number and then collapsing back lower to re-test the 106.30 support below it.  We have drawn trend-lines above and below current price-action to create a price-wedge on the anchor chart this morning and will use those two levels as major support and resistance.

The 5-minute chart of Crude Oil shows us some very important clues this morning.  

Crude Oil VIP-Chart

First, we can see the bullish price-channel has ‘almost’ been broken with new lower-lows this morning.  We recall that on Monday we ‘almost’ broke the lows as well, but ended up closing higher on the day after the sellers failed.  This morning we can see this bull price-channel is about to break and a possible price-reversal may follow. 

Second clue we see is the PHOD and PLOD.  We have broken back below the PHOD which tells us the buyers tried and failed coming out of the London trading Session.  This is a big clue because we will use our Inside-Out Set-up to get short below the PHOD when the buyers fail like this, and we use the PLOD as our profit-target for the day session.  We will be looking for selling-opportunities courtesy of this failure above the PHOD.

Third clue we see is the trading-range from London is less than $1.00 so we know this is considered a narrow trading-range and we can expect that to continue this morning until something changes the market personality.  

Narrow ranges are easy to trade, but we need to identify the range as being narrow so we can apply proper trade-management.  Remember, there is major news today, so that news may be what this market personality needs to widen its trading-range today, so keep an eye on the news.

Crude Oil Entry Chart

The Entry chart of crude oil shows us jumping up higher, and then collapsing back down to test the short term trigger zone at 106.47.  It looks like this market lacks confidence to one side or the other this morning and if we get back below the 105.73 we are looking for the short selling opportunities to begin.