Market Commentary, Schoolortrade.com. Great Return After Yesterdays Loss

Market Content August 28, 2009

Today was a much well deserved day of profits! The past few days this week the markets have really slowed down in price action, and our daily profits reflected this. Today was a little different though; we began to see some great follow through in price action, something we hadn’t seen in the past few days. We were able to scalp two trades out of the market today with a total profit of $120! Let’s review those trades…….

Our first trade set-up came on the Crude Oil market (Symbol CL) prior to the opening of the open outcry pits at 9:00am EST. Something we had noticed today, while reflecting upon this week’s price action was how much volatility there was in the Crude Oil market, price moving from the high 60’s in price to the mid-70’s and now back down to the low 70 dollar a barrel range. Our trade set-up today around 8:00am EST, while the Crude Oil was climbing higher in price into the 73.00 level, it quickly began to see resistance and was pushed back down. We then noticed the short term trend had changed to the downside and began qualifying possible trades. At 8:17am EST we finally saw price quickly reverse to the upside, and with buyers taking control of price we entered long with a 2-step at 72.95. Once in the trade, we were able to use our automatic trade management via Ninja Trader and closed our trade with a profit of +3 ticks (2 contracts) before getting scratched out for a total of +6 ticks ($10/tick).

Our final trade of the morning came on the Mini-Russell (Symbol TF) after the opening of the U.S equities market as well as the passing of numerous news events. This trade was taken later in the morning and although a riskier set-up due to the time of day and it being summer time, we still felt confident because of a few key indicators. First, we notice that price action and the tape were moving at a relatively fast pace, and secondly, one of the main determining factors of why we entered the trade, was that we saw a large group of buyers hit the tape at the last second.

The mini-Russell had been slowly trending downward, and with the increase in price action we began to suspect a reversal was about to occur. Price action then created a swing high for us to use as an entry level and we looked to go long above 581.0. While price action began to move in our favor we noticed on our filtered time & sales window that a large group of buyers were entering the market, and so we entered long at 581.1 10:39am EST. We were quickly able to scalp off a +3 tick winner (on 2 contracts) for a total profit of +6 ticks ($10/tick).