As Expected, Even More Incredible Trading Today

Okay gang, welcome back! What an exciting, exciting day! People thought I woke up and ate my extra bowl of Cheerios and Wheaties today in the way we fired off trade after trade after trade in the live trading room like a machine gun. Well deserved, well earned and very profitable.

As we go ahead and focus on a couple of the key markets going into tomorrow, I’m going to give you guys some updates. This may be the last update for the week for you all because of the fact we’re going to be driving to Colorado, and along the way, we’re going to be stopping to see some of my students who are going on the cruise and who have donated to our charity. We’re going to get a head start on that tomorrow since it’s a pretty healthy drive, so I just wanted to let you guys know. I want to give you a good update this evening.

First things first, you’ll recall with the Euro, we were looking for a move to the upside. Because of my skipping rock theory (reminder: hitting, pulling back, hitting, pulling back) as we keep on knocking on that door, the expectation is ultimately that we are going to have a push through. It could be pretty meaningful for us as well. I did not trade the Euro this morning because we were just doing way too much in the U.S. Stock Index Futures. What we’re looking for is to see if we can get a two-bar break above the channel here and a pull back to it.

In fact, let’s give you an update on coffee while we’re talking about the Euro. While the two have no correlation for each other there, what’s important is we did have the two bar break, but remember, I don’t look to buy there. In part because we had hockey stick sell signals, and also, the whole point of this is that I want a test back of the channel, and I want us to hold the channel and then start to take back off. That’s where we start looking for long side trades.

Right now we have the two bar break and a pull back. Let’s see if we can hold here and start to take back off. That could lead to some great buy side. That’s why there’s some different elements that go into the concept of the two bar break.

As I already said, I have a little more work to do with the Euro. Let’s see how tomorrow plays out and Friday. That could lead to some great opportunities going into next week.

Gold went ahead and did push a little bit higher challenging the midpoint of my channel and stalled out. Interesting to know, it looked very attractive on a long side basis intra-day when it hit that area. I warned people away relentlessly on this one because that’s a major resistance area in the midpoint of that channel. It’s a fresh touch in that area too. Great place to find fresh sellers. We went ahead and backed off at that point.

As we look to crude oil, we’ve been talking about it in swing trade videos and even here a little bit since we were looking at fresh shorts and fresh short signals. We had another one yesterday with the crude oil inventory report. We didn’t make a lot of headway today – it was kind of a doji star period of indecision. As you can imagine, the same level I gave you yesterday is still very important to me. That’s that 4265. If we can start breaking through 4265, I’ll be getting aggressive looking for shorts to the down side with initially a trailing stop back behind 4265, but I’ll be looking for much greater things if it can hold.

The NASDAQ had some really great stuff. On one end we came right down to some major long-term resistance here. We got a mini head and shoulder pattern here, but I’m not too worried about that per say. But what I am interested in here is the fact that we did hit this long term resistance just like we did over here. We bounced and here we are hitting that again. That could lead to some fantastic trading if we can break through that long-term support. As you can imagine, I’ll be watching that very closely.

That brings us to the U.S. Stock Index Futures. This morning was just relentless and fun. Trade after trade focusing there this morning. What happened to kick this all off was the VIX. The VIX opened up this morning and was driving up. As you recall, that’s exactly what I was looking for if you’ve been watching my videos each night, I want to get above 14 and start pushing towards 15. That’s what I told you. We actually opened up at 15 and started pushing to 16, which is even better for the short side. So being armed with that information we got right into the US stock index futures.  This thing just dropped like a stone.  There was retracement followed by another big drop.  After that it came back up right here and became technically damaged.  We actually shut down the room after that and held out for a little bit longer.  I also did an important Q&A from all the trading that we did earlier and then we just backed up.  At that point it is like ding dong the witch is dead.  We rode the pony as long as it could go and eventually it needed a serious break.  There was some great short side trading this morning.  The trend was in place with the sell signals.  But once we had the technical damage then we just backed up.  Of course going into the afternoon it started to drive to the upside.  The technical damage concepts gave some forewarning.

So armed with all that information going into tomorrow you will notice we actually popped back into some key supports and held some key supports.  So number one, in the NASDAQ we held these very important inventory retracement bars.  We held along the top side of those.  Also on the S&P you can see the inventory retracement bars there.  Those are the same ones as the NASDAQ.  We went ahead and got down into that area.  However that was previously a strong accumulation area that held once again today.  So as soon as that technical damage kicked in, we saw it was time to back off of the shorts.  Ultimately, you see we wound up right back into these inventory retracement bars.

The money tomorrow will be a little bit harder earned more than likely, especially if it is to the downside.  All four of these have fresh inventory retracement bars.  Whenever you short into the fresh inventory retracement bars the risk is higher.  You go in and you take your short then it has a nasty retracement back up and some fresh buying.  After that it might come down and you got stopped out at the top process first.  That will be a major focus tomorrow morning with the live trading room.  If it actually pushes to the up side on the follow through, I will want to be above the speed lines before I consider a long on all three.  I will also watch the VIX to see if it drops down.  The VIX right now is at 13.61, and I will want to see it get below 13 towards the 12 area before I look for a long side trade.  Nonetheless, there was some fantastic trading today.  There is so many more great things to come like the Euro, crude oil, gold, US stock index futures.

You guys have a wonderful night!

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