Market Pullback – Futures Trading Strategies

Ok, gang, this video is being shot just a few minutes before the close, but, man, what a great day! As we wind up here, a lot of the stuff that we talked about in last night’s videos really came to fruition. Let’s talk about a couple of the key things from last night, and going into today, and then what we’re looking for tomorrow. So, first things first, the Euro, here, I warned everybody away from the Euro from my perspective, last night, and the reason being is that we have an awful lot of news coming out, and after this big-down bar, here, that could lead to a wild ride. Well, sure enough, we had that big-down bar yesterday, and then we had a wild doji-star ride in the end, going absolutely nowhere when everything was all said and done, but certainly enough damage width-wise to stop traders out on both sides of the fence. Not the kind of trading we wanted to be in, and that played out as we talked about.

As far as Gold, with Gold, here, I’m looking to see if we can get down below this 1287 area, looking for short opportunities. Won’t want to do anything with it to the upside, remember that’s the “gobbly-gook” area, but if we can break down below this 1287 area, there’s a lot of room to grow to the downside, so I’ll be keeping my eye on that.

Similar with Crude Oil, I want to get below the 10180 area and that would be the first push I would like to see here. And, if I really want to get warm and fuzzy, because you see there’s this support in the back-drop, over here, 10180 is my watch point and 10150 is where I’m going to get really aggressive on this, because 10150 we have this accumulation bar in the back-drop, that inventory retracement bar, and, so, I want to see if we can breakthrough there, then that will lead to a lot of room to the down-side, as well. So we’ll be keeping an eye on Crude Oil.

As far as the 30-year Bond, we talked about the 30-year Bond last night, and I said “Look, gang, you know, it’s a little bit concerning that people are NOW asking me on buying here, on a breakout of this area”. And my comment was, “Well, actually, the signal was back here, kind of like we talked about, and the even bigger issue is that we still have this inventory retracement bar in the back-drop, over here, holding us down.” And sure enough, we came off like clockwork, here, today, off that distribution area. And, so, it’s real important that we keep these things in mind. Where our entries are, based on the strategies, and where our stall-out, major risk points, are, based on my methodology. Great stuff there.

Stock Index Futures Talk

As we look to the Stock Index Futures, well, that was great stuff too. You recall that I told you we had triple sell signals. We had what we call the “Hoffman Fades”, which were also combined with hockey-stick sells, and these are stochastic spikes. So, we had what we call triple sell signals, here. These are the Hoffman Fades, which then became a stochastic spike, and then a hockey-stick sell, so a triple sell signal as of yesterday. We talked about that a lot in last night’s video, go back and watch that. What that did, that really capped any of that upside movement and really started driving us down. So, the way I played this, this morning, remember I’m going to be looking for two things; basically buy-side and sell-side. I said that if the Russell can get back above this resistance, here, I’ll look for some long-side trades, because, sometimes what can happen, is that when the sells don’t sell, you’ve got three sell signals here and of course, statistically speaking, most of the time those are going to sell then. But the few times they don’t can lead to some INCREDIBLE runs, some huge blow-offs, as everyone gets caught on the wrong side of the trade and this fever sets in. So what I did, initially, shortly after the open this morning, I went long. It was a very short-lived move, it was only like a 3-digit gain, and it was not a lot of money at all. But, managed to make money nonetheless on the long-side, here, initially. And then, the Market came back and started to roll back down, and we kicked in those sell signals on the day, then that opened up the real money that I ended making on the day. So, good stuff, and after it is all said and done, the sell signals held us down and kept us from any forward energy today. We watched that tick by tick, this morning in the Live Trading Room, which was some really great stuff and learning opportunities for all of our new students and old alike.

As we look to tomorrow, now, we’ve had a little bit of bleed-off, we did not get any, sort of, major selling. So, the way that I’m going to play this tomorrow, I’m going to see if we can breakthrough today’s lows. That’s going to be the first thing that I’m going to be looking for, because today’s bars, if you’ll notice on three out of four of these Markets, they’re doji-stars, and really you can argue that the Russell is a doji-star too, but it’s not necessarily fully an inventory retracement trade, you know, the accumulation bar, unlike the other ones, which you can see, as of a handful of minutes before the close, here. Those ARE inventory retracement bars. If we can get down below those lows going into tomorrow morning, I’ll be looking much more aggressively for short-side trades. At the same time, if we start pushing through today’s highs because, here again now, this is a distribution bar, that’s exactly what a doji-star is, it’s an accumulation and distribution. You’ll notice actually that the Russell is a distribution bar. So, if we can get through today’s highs, I will be very aggressively looking for longs. It’s a very unusual situation where if the buys don’t buy, I’m looking for the sell, and in this case, if the sells don’t sell I’m looking for the buy. Same concept going into tomorrow, because we have accumulation on the downside, distribution on the upside, which is what capped us there and froze us in time. Now, I want to see what kind of follow-through day we can get. Will the follow-through be to the downside? Will the follow-through be to the upside? That could lead to some intensive movement. So, that’s what I’m going to focus on tomorrow. But, also, don’t forget about Gold, Crude Oil, both of those have some good opportunities, as well. The Euro, again we have awaited that, and we still have more European news coming out tonight, going into tomorrow morning, and that also made like a doji-star day, a wide ranged doji-star. We are pretty much going to avoid the Euro going into tomorrow morning, as well. But, the Stock Index Futures were also going to open up, like I said, some nice opportunities to see if can close out our Friday real strong. So, great week, I’m looking forward to seeing each and every one of you in the Live Trading Room tomorrow morning, or in this weekend’s videos here, gang. Take care, have a great evening!

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