Market Commentary from Schooloftrade.com

Market Content August 10, 2009

Well I think it’s safe to say today might have been the slowest day of the summer. This fact alone proves why today we barely walked away with profits. Here are the trades we took today:
Early this morning proved to be non-existent in terms of volume, and we did not take our first trade until after the open outcry pits opened for the Crude Oil at 9:00am EST.

We noticed that the Crude Oil (Symbol CL) was beginning to trend lower during the open and looked initially to take a James Wave short, but after hitting support around the mid 70’s we noticed the buyers began to take control of price once again. We decided to take a trade to the long side in the pattern of a 2-step when our James Wave pattern failed to the short side. At 9:15am EST we were filled long at 70.80 and were able to get our first two targets of +3 ticks and +6 ticks for a total of 12 ticks on 4 contracts ($10/tick). Our first target trades with 2 contracts, and then we scale out of the rest of our contracts on a 1 contract basis for our final two targets.

Our next trade came after the 10:00am EST TAF Auction. We began to notice higher volume in the market, especially the Mini-Russell (Symbol TF), via our new indicator, the Pace of the Tape indicator. After verifying that volume was indeed in the market, we looked to take our next trade. Once again we saw a 2-step long and at 10:10am EST we entered the market long at a basis of 570.7. Once in the trade, we began to read the tape intensely to see if there were any true buying pressure in the market and just before we were about to close the trade at a small win, the buyers really stepped in and we were filled on all three targets for +3 ticks, +6 ticks and our final contract getting us +2 ticks for a total of 14 ticks on 4 contracts ($10/tick).

The third trade of the day came on the Crude Oil once again (Symbol CL). This time we looked to the crude market short on a 2-step pattern after a James Wave failed to make new highs. At 11:05am EST we entered the market short at a basis of 71.39 and once in the trade began to watch price action on the tape. We soon realized that price action and sellers were beginning to slow down and so we closed our trade early, closing with a scratch on the trade; nothing gained, but nothing lost either.

The final trade of the day was one we wish we could take back, but not every trade we take can be a winner, that is the brutal truth of trading. Our final trade of the day came on the Crude Oil market again (Symbol CL), we saw the market taking Crude lower for the day and began to look for a possible James Wave set-up to the short side, but it was disqualified, so when the Wave fails, we look for the 2-step to prevail. At 10:45am EST we took the 2-step long on Crude Oil at a basis of 71.34. Once in the trade, we saw some good size come across the tape to the long side, and unfortunately just missed getting our first target of 3 ticks before the market quickly reversed and stopped us out at a full 6 ticks or 24 ticks total when trading 4 contracts ($10.tick)

Today’s totals: 2 for 4 $20 in profit