2/2 Today In the Live Trade Room

Market Content October 5, 2009

Today we saw some decent volume in the market, especially for a Monday morning! Early on during the electronic trading session, the Crude Oil market had begun to drop in price sharply, on low volume, but didn’t last long ( Crude Oil Futures Day Trading Video). Once the open outcry pits began trading at 9:00am EST, price started to retrace off its lows back towards $70/barrel. This rally lasted only so long though, with the ISM Non-Manufacturing PMI being released at 10:00am EST and sending the crude oil market lower with sellers pushing it back into the $68 price level. During the morning session we were able to take 2 trades, going 2 for 2 with +$160.00 trading 4 Contracts.

Our first trade of the morning came after the ISM Non-Manufacturing PMI was released at 10:00am EST. Prior to this news event being released we were able to determine the market sentiment by a slowly decreasing P.O.T, as many traders anticipated the news event and were waiting to take positions in the market once it was released (Identify Market Sentiment For Day Trading Futures). Once the news event was released, the crude oil market (Symbol CL) began taking back its rally, with a strong level of sellers entering the market. Deciding to execute our trades with the downtrend, we looked to enter the market short, which we did at 10:13am EST with a Breaker short at 68.78.

Once our order had been executed, we watched our technical indicators closely to determine if our order would be successful. After seeing momentum as well as sellers enter into the market even more, we were able to close out our trade with profits of +4 ticks (2 contracts) for a total of +8 ticks ($80).

Our second and final trade of the morning was taken just prior to the start of lunch time trading for the U.S markets (history shows us a strong level of low volume during the lunch hours, and can be a dangerous time to trade). After the news had been fully released at 10:00am EST, the crude oil market (Symbol CL) had begun to sell off sharply again, and looked to find its bottom around the $68.00 price level. We noticed this bottom had been formed based off of our technical analysis and the use of our 2-step trend reversal trade set-up. With a possible trend reversal about to occur, we watched intensively to see if the price pattern actually set-up (Price Patterns Technical Analysis Futures Video).

Once our 2-step pattern set-up we looked to enter the market long, and sure enough we were given the opportunity at 10:46am EST, with a basis of 68.26. Once involved in the trade, price action quickly broke a dynamic level of resistance we had identified and we were able to lock in profits of +4 ticks (2 contracts) before closing our trade, with a total profit of +8 ticks ($80).