Hey, what’s up, fellow traders? Happy Wednesday. It’s a short week of trading because we just had the holiday weekend here and today was actually my first day making a trade. Yesterday, I opted for a no trade day and for good reason. There was a huge storm rolling through Chicago just at the time that I’m typically in front of my screens. I felt like the roof was going to fly off. My patio furniture was flying everywhere and I told everyone in the room, I said, “You know what? This is a Mother Nature stop.” It was swirling winds, bad rain. I was not going to be able to focus on the markets, at least in good faith, when knowing that there’s all that chaos outside. So literally I didn’t trade due to a horrible thunderstorm. Okay. I know there’s some bad storms that are rolling through due to the hurricane and so forth so I’m not going to minimize that. But that’s the reason I didn’t trade yesterday.

Fast forward to today. Logged in, looking for opportunities and what caught my eye this morning was an overbought, exhausted, E-mini S&P market so you know what we did. We got on the short side looking for bearish breakouts. We scalped on two occasions that ended up extracting over $3,300. Don’t worry, I captured all the action live while I was in the Futures Trading chat room, providing my commentary and talking through the technical management of the trade. Enjoy the trade, hope you learn something and I look forward to meeting you back in tomorrow’s session. Until then, trade well and be well. Bye bye.

Hey, there you are. Happy Wednesday. It’s already hump day here and I feel like it’s our first day together because yesterday was a no trade day as you know. Mother Nature stop kicked in. My deck furniture was flying everywhere. We had some 70 mile an hour winds, little gusts at one point that were throwing me for a curve ball. Nothing like, obviously, to the hurricane but enough to say, “Hey, you know what? This is a good day to maybe sit on the sidelines.” We’re in breakdown mode on the E-mini S&P. I’m on the short side at 28 1/4. We’re already here now. Market’s at 28 3/4. Actually just a little bit higher, a little better price right here. Now let me go get my drawing tools if I can find them, so I can chalk up my screen and see if we can’t find a learning opportunity today as well. Bear with me.

All right. Now, we’re armed and dangerous. We can draw on my screen now. Just getting settled in here. Seeing what’s cooking here. Market’s up 23 1/2 here on E-mini S&P to start things. Nice little breakout mode trade to the upside, break out of that big volatile box here. I’m watching this area down here, looking to get a little help from that congestion zone up above on the 10 minute. Market’s retreating up here up near that 30 1/2 area. Look at here. We’re coming in this key zone here, supply area as well as that master point of control pressed up there. You’re also just getting a little pressure here from that POC. For me, I’m going to add right here, right now to this position. Moments ago just added. Tell you my price here in just a moment. Got 30 1/2 on that one. Okay, so first entry is 28 1/4. Next one’s 30 1/82. It’s going to be my cost average 29.38 so let’s call it 29 1/4.

We’ll see. This is a big battle market needs to defend if it’s the short’s going to hang on here.

Market opened up, stock market opened about 10 minutes ago, so market’s digesting the overnight optimism here. We’ve seen some congestion up above here and actually market’s starting to break up above here. You can see it here. We are at 31 even now against the key area for shorts to defend if they’re going to defend it. Call it quits point on this one. There’s a couple of places to think about it. My stops up here at 37 1/2, 37 1/4, I’m sorry, right up here. 37 1/4. I’m going to move that stop down relatively quickly if we get a chance here. If the market retreats off that supply and master point of control, that’s what needs to happen first and foremost. Right now, the gates take a little heat on this trade. First trade of the week for me. Post-holiday. Hope you guys had a nice holiday. That being said maybe you could trade micros as well when it comes to the E-mini S&P symbol, MES. So instead of ES, I’m going to do MES.

And this is the part that’s hard. This is the sit and wait. This is the part that I think a lot of traders really have a tough time with. It’s kind of like very selective patience, right? Well, I’ll be patient so long as I’m winning right away, but I will not be patient if I’m not.

Let’s go scan through, take a look at some of the other markets here in the meantime. Let me move some things around on my screen here. Let’s go take a look at the crude oil. It’s October contract up 167, huge run up here in the crude oil. This is definitely one to watch for a short side opportunity but not here, not now. Look how we’re way up above kind of in explosion mode here. That’s a total crap shoot to be hitting the sell button up there. Again, bright green bars is [inaudible 00:06:35] telling you be long stay long, don’t you dare fight it and you can see it’s been a nice continuation pattern here even on the 30. Got the break to the upside here, here, here, and then of course most recently, here. It means you only trade this side. Nice clarity on the short side sale there as well prior. But here’s what I’m watching here on the crude oil. Okay, now we’re already short the E-mini S&P here. So you remember crude oil and S&P are often times kind of parallel to themselves. So we’ll kind of keep up a peek on the crude oil here as well.

Yeah, the E-mini S&Ps retreating just a tad here and it needs to come down a little bit more here. If we get rebreak down below that low value error, I’m going to like this trade here right out of the gates. Okay? It’s got to come on down. Okay. This thing could go anyway right now. Okay. One thing I wanted to kind of clarify, so what I’ve circled here is what we call the value area. I might call it the balance area. Okay, so anywhere between the red and the green lines, it’s fair game for the market to bounce around in there. It’s called the fair auction in market profile world. It’s when we break and especially close outside the levels. If we close above, it might start, bulls might start to take over control of the market. You’re starting to see that press right up against that supply area. It’s got to hold. We’re going to see, not looking so good right now. You’ve got that plywood resistance, that’s encouraging, but it’s got to stay down below. You can see that level of 31 1/4.

We’re not there now, so okay, I got my stop up a little ways. Give it a little breathing room, but that’ll be my call it quits point there, up at 37 1/4. That’s 9.0 risk. That’s 450 a contract. Remember micros allows you to dice that up in tenths if you’re looking for a low risk trade.

Let’s go take a look at the gold market in December. Gold contract down just $2 here today. You can see it’s in bullish breakout on both the 10 and the 30 again, this one looks bullish, in the thick of it here on the 30.

Yeah, I do see that here on the edge. I got that up on this screen right here. I’ll bring that down. That’s a good point. Chip’s talking about this right here. How we’re way up there. Yeah. Plus 70, about 75. Right. That’s good because remember we put this line here for a reason. This is the 66% line or the two thirds line. So when that green line’s up there, it means the bulls really kind of stretched that rubber band extensively here. In fact, you want to know how extensively? 437 of the stocks of the S&P 500 are bullish on that five minute short term time horizon. Now you’re saying, “Why the heck aren’t we long?” Well, the place to get long was much earlier on in this migration higher. Once you’re up here, it’s a rubber band that stretched pretty high and yeah, he could stretch it maybe a little bit, a little bit more. But again, you’re kind of really starting to beat the odds once you start getting in there, plus 80, plus 90. At those times, your higher probability meteor trades are going to be on the short side. We just got to be patient, wait for that market to do it. Okay.

We’re already positioned on the short side. So for me there’s not really much to do other than to kind of let this hopefully get exhausted. Let that rubber band get stretched out even just a little bit more. And then we want to see this come on down, we’ll see the red lines start to climb up, because that’s going to mean the bears are going to start to come back.

But look at all this starts to evolve here. 30, just 39 stocks. We’ll look at this a little bit and hopefully that number will be over 100, 200 maybe it’ll eventually get over 300 if the bears really come down with their claw in the market. We’re going to see, okay, this is what the trading is. It’s the evolution of changes in these markets.

 

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My Shorts In Emini SP +$3,362 | Steve's Futures Pulse 206
My Shorts In Emini SP +$3,362 | Steve's Futures Pulse 206
My Shorts In Emini SP +$3,362 | Steve's Futures Pulse 206
My Shorts In Emini SP +$3,362 | Steve's Futures Pulse 206

My Shorts In Emini SP +$3,362 | Steve's Futures Pulse 206

My Shorts In Emini SP +$3,362 | Steve's Futures Pulse 206