Day Trade Futures, 8-31-09

Market Content August 31, 2009

Needless to say we at the School of Trade are happy to see that summer is almost over, and hopefully by next week volume will have finally come back to the market. Until that time though we will continue to study the markets and watch them closely in order to not miss any potential trades. Of course today’s market action was certainly nothing to write home about, but fortunately enough we were given some great volume in the Crude Oil market, where we took all of our two trades in today. The trade total’s today were 2 for 2, with a profit of $250! Let’s review those trades…..

Our first trade of the morning came shortly after the opening of the U.S Equities market at 9:30am EST. We had to thread the needle in a way because we would only have about 15 minutes between the opening of the U.S Equities market and the next news event, the Chicago PMI to find a possible trade to take. We had noticed on the Crude Oil (Symbol CL) that it had been in a strong downtrend since the open, and had dropped nearly $3 in price since the open of the European session. Then around 9:30am EST after continuing to the downside, we noticed that the Crude Oil might be setting up for a 2-step trend reversal after the opening of the U.S Equities market. So at 9:39am EST we entered the market long on a 2-step with a basis of 70.27; we quickly saw momentum via the Pace of the Tape indicator and our Stochastic indicator curl up, we were able to get our first target and were actually filled with a profit of +5 ticks (2 Contracts) before getting scratched out of our remaining contracts for a total of 10 ticks ($10/tick).

Our second and final trade of the day came a little bit later and once again on the Crude Oil (Symbol CL). After our first trade the volume in the Crude Oil began to slow down considerably and we were beginning to think lunch might come early for traders today. As the volume continued to decrease, it quickly came back into the market around the 11:00am EST hour, once the new events for the day had come and gone. At 11:00am EST we quickly realized the Crude

Oil market had slowly continued it’s decent and was now trading almost a dollar less than when we took our first trade. With the Crude market selling off strong, we continued to identify possible James Wave patterns, but the market wasn’t willing. Then at 11:19am EST we saw our first pullback in price, and qualified our 2-step trend reversal to the long side. The price action was moving at an increasing pace and with green Pace of the Tape bars; we took a 2-step long at 69.56. Once in the trade, the speed of the tape continued to increase to the up side and it seemed as if buyers might have finally taken control of the market, we were able to lock in our profits via our automatic trade management system off our Ninja Trader charts with +4 ticks (2 Contracts), +6 ticks (1 Contract) and our final contract for +1 ticks for a total of 15 ticks on the trade ($10/tick).