Rob’s Thoughts For Holiday Trading Monday and Beyond

Welcome back! It’s an exciting time to say the least. I’m looking forward to meeting my students from this weekend where I’ll be speaking to a wonderful group here in Utah. In the meantime, I’m on a single laptop so I apologize that there’s a little recording tool bar in the right hand corner.

In the interest of time and frankness, I’m going to focus on Stock Index Futures. There are two things that we have to consider going into next week. We’ve had a good run, and we of course had a cap to that run today as you can see on Friday. We didn’t push up and we really didn’t push down for the most part. This is an open field going into next week. Now, here’s the trick, Monday is Columbus Day. I’m not actually going to trade on Columbus Day. I know a lot of retail traders trade days like Columbus Day because they get a holiday off of work, and what will happen is they’ll run out and be weekend warriors so-to-speak and hone their trading skills. The problem is liquidity is going to be lower because a lot of the major banks are closed. Columbus Day is one of those holidays where there’s a movement going on that we shouldn’t celebrate his birthday. A lot of the mainstream banks are actually closed so that’s a reduction in liquidity and that’s not good. If you throw around one contract or so you’ll still get some slippage here and there but for a futures trader or equities, the point is that it’s not really a favored day to trade. Historically, I’ve taken that day away and for good reason. Tuesday will be the actual trading day. Plus, on Monday, I’ll be getting ready for seeing those of you who are going to Las Vegas. All of you who are active student members, you got my very long list of events that I have for you all day Thursday and all day Friday. So come to Vegas and get two full days of Rob. That’s going to be awesome. What a great way to spend two great days with me. I’m really looking forward to it. I can’t wait to see you guys.

With that being said, going into Tuesday of next week (and those of you who are trading on Monday), what you’re going to look for is do we break above the highs of today’s session and look for continuation longs or do we roll back over and break down below the lows from Friday. You’ll see very tight days. We’re coiling up getting ready for the next big move. I’m not as excited about Monday because you can take a very little volume and move the market very rapidly in both directions. I prefer to see dual liquidity. That makes me feel a little better. I’ll be looking at this strategy going into Tuesday. So Friday’s high and low is going to be important to me for both Tuesday’s trading perspective and also Monday. Tuesday we’re going to be looking at the same thing. When we open up on Tuesday, are we at Friday’s lows or are we above? Then what’s going to happen is the speedlines are coming up under here as well as support levels. When I come in on Tuesday, I will see if we’re below the lows from Friday and are we below the speedlines. I’ll be very excited looking for short side opportunities. If we’re above Friday’s highs and holding there, I’ll be looking for continuation longs. But today, we were due for a pause in strategy in place just like yesterday. But you’ll notice we didn’t get the movement like we did yesterday. Yesterday we were able to follow through with the strategy very nicely because we had movement. Today we didn’t have movement so no follow-through so that’s exactly why we have these rules and what we’re looking for in place so we take the right trades for the right time for the right reasons.

That’s what I’m focusing on for this evening. We’ll be back with you on Tuesday. I’m looking forward to a great holiday weekend. You guys have a great weekend. Remember, keep it cool and keep it tight to the vest. Be prepared for slippage on Monday. Watch out for wild whipsaws back and forth because it’s a lot easier for one or two big players to move the market around when you have holiday trade.

Take care everyone!

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