Market Commentary from Schooloftrade

Our first trade of the day came early on the Dax Futures (Symbol FDAX). The Dax began to short into the open of the London market at 3:00am EST and continued its trend for almost an hour. Then at 3:54am EST we noticed that the sellers were beginning to take profit around the 5600 price level. We quickly saw a 2-step trend reversal pattern setting up and decided to enter the market at a basis of 5612.00 to the long side. With momentum curling sharply in our favor, the Dax price action began to speed up in our favor and we were able to lock in profits of +4 points, or a total of +8 ticks on the Dax ($36/Point).

The second trade of the morning came once again on the Dax Futures (Symbol FDAX). The Dax had continued to consolidate into the 5600 price level since our first trade and we were continuing to look for one of our James Wave patterns. The market continued its downtrend, until shortly after 5:00am EST when we noticed the selling pressure had once again began to die down. At 5:15am EST we entered the market on a trend-reversal 2-step long with a basis of 5596.00. With our first price target at +4 ticks, we watched intensely as price action tested our first target three times, and when we still were not filled on our first target we decided to close our trade early because the price action was showing little to no conviction it was going to go high, we closed the trade at break-even.

The third trade of the morning came on the Crude Oil market (Symbol CL) just after the opening of the Crude Oil open outcry pits at 9:00am EST. At this time in the market, it had had a strong uptrend, rising over a dollar in price since the beginning of electronic trading, and we began to look for a possible trend reversal into the US equities open. Trading into the open of the Crude Oil pits, price had begun to consolidate around the 69.50 price level and seemed to already beginning its transition to the short side as volume entered the market. At 9:02am EST we took our latest School of Trade set-up, the Breaker, which is a short term trend continuation trade with a basis of 69.30. We took the trade because our 2-step trend reversal set-up had failed and price action looked like it was going to continue its downtrend into the open. With the stochastic’s curling in our favor, and with price action giving us a steady flow to the short side, we were able to lock in profits at our first target of +4 ticks (2 contracts) before getting scratched out of the trade, for a total of +8 ticks on the trade ($10/Tick).

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