What We’re Looking For Next In Index, Gold And Crude Oil Futures

Welcome back everyone. Rob here with you. First off, before we get into tonight’s information I was to go ahead and thank all of the fantastic people from around Germany and surrounding countries that came to the incredible event we had on Saturday at the World of Traders in Germany. It was extremely well attended. Every seat in the entire room was filled and there were people lining each of the side wall and back walls. So pretty exciting to go ahead and have so many people come to that awesome event.

Looking Forward for Short Opportunities

As we go ahead and get started tonight here, let’s look at the stock index futures. From my perspective, the big thing I’m going to be focusing on tomorrow is: can we get below the speed lines? Especially the fast speed lines on all four of the stock index futures. You’ll notice we’ve got the S&Ps here at 1:04 are basically sitting right at the fast speed lines right now. We have the Russell actually below the fast speed line and it is at the slow speed line. The NASDAQ also took a little bit of a hit on today’s session and went ahead and pulled down through the fast speed line and is at the slow speed line. The key is the DOW. The DOW has been a little stronger here and is holding above both the fast and the slow. So we want to see if we can get that one to start pushing down tomorrow. We’ll see if that will offer up some short opportunities.

The Three to One Rule of the Indices

It’s really important that we get all four of these showing the same message. If we have one that strays that usually becomes its own individual trading opportunity. For instance, this morning, that is exactly what ended up happening with the Russell. You notice here at 1:55 that most of these instruments were actually trading up this morning (S&P, DOW, NASDAQ) however the Russell was pushing down. This is a screenshot at that time (4 minutes into the US open). Notice what happens though, I pointed that out to everyone and then we start seeing it get more exacerbated where we had the stock index futures up here (on my charts at 2:19) crude oil was here and the NASDAQ was dramatically down. Well, conventional retail trader wisdom is that the one is probably going to go back and meet the three but in the real world what I often find is to be just the opposite. Typically the three come back to the one as you’ve heard me say many times in the past. What ended up happening, as sure as can be, you’ll notice that it got much more intense a few minutes later (on my charts at 2:42). That first slide was at 8:34AM. Within seven minutes you’ll see that, now all of a sudden the other stock index futures started coming down with the markets. So you’ll see the DOW sort of pulling off its highs here at 2:55. It got even worse and then the DOW started coming down even more. So gang, this is a great way to help you identify areas that can offer up some really fantastic trading opportunities. I’ve talked about it many times in the past and I wanted to share that with you again tonight.

Keeping an Eye on The DOW for Tomorrow

So as we go into tomorrow I’m going to be watching what happens with the DOW. Does the DOW get on board with the other three there and start trading back through the fast speed line? Maybe we’ll start finding some short opportunities if so. In the meantime I’m going to be focusing on gold and crude oil. Of course as we’ve talked about in some recent videos, I had some more bearish outlooks on crude oil for the reasons I mentioned. US oil production stepping up and looking to surpass that foreign counterpart by 2016 and so on and so for. What I’m looking at on my charts at 3:50 is we’ve got this nice accumulation bar that we set from last Thursday. You’ll notice we ate into that pretty good today. I’d like to see if we can break through that low from last Thursday which also happens to be a Momentum Shift bar as well. So that could be a nice signal. I’ve been looking for this opportunity to get moves down the ninety dollar level. We’re going to be keeping a real close eye on that going into tomorrow’s session. The reason why it’s important is because we saw this same kind of thing happen this morning in gold.

Hoffman Hockey Stick in Gold

First of all, gold went ahead and had what we call, the hockey stick here at 4:21. It’s kind of a Hoffman hockey stick and you can see that is up and over here. Typically what you are looking at after a situation like that is a pullback down. So, that was the first thing.  Then as we looked into the intraday session we needed more information to actually trade with. Well, early on this morning we had this really nice accumulation bar and we’re going to go ahead and be looking to break down through that. You’ll notice on my charts at 4:49 that once we broke down through that, it dropped over sixty additional ticks. That was actually the trading focus (we shorted in gold this morning) in the Live Trading Room.

We’ll be talking about that at the Las Vegas Traders Expo where we will see several of you. We will be talking about this trade set-up and many more at my talk during the Traders Expo. We really look forward to seeing you guys there in the next couple of days. I just wanted you guys to see (on my charts at 5:17) what our focus was there.

Going into tomorrow we’ll see if we can continue that move down. Particularly, I’ll be watching for short opportunities below the twelve seventy and then getting even more excited below the twelve sixty level. So, we’ve got gold and crude oil with some great opportunities and we could have some great opportunities in the stock index futures if we get some more sell pressure coming in there tomorrow morning. If we can get all four of the stock index futures to start punching back to the upside sharply that too could offer up some great opportunities in itself. Right now I’d like to see a little bit of a correction here. I was at my barber earlier today and even he was like “Wow! You know DOW 1600. What do you think, Rob?” You know when I start seeing people off the street getting so excited about it I’m usually more excited from a trading perspective to see some more aggressive pullbacks when everyone else gets excited.

Those are going to be a couple of key things to watch going into tomorrow. I look forward to seeing each and every one of you in the Live Trading Room tomorrow morning, in tomorrow night’s videos, and hopefully a whole bunch of you at the Las Vegas Traders Expo for our big event. Have a great night and we’ll see you shortly.

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