Market Up-Date, Trade-by-trade Results.

Market Content August 7, 2009

Today we saw another day of low volume in the market, which although is expected, made us extra cautious about taking any trades that were not perfect. Let’s review the trades we took on this summer Friday:

Our first trade of the day came on the Dax futures (Symbol FDAX) at 4:16am EST. We watched price closely as a 2-step to the long side began to set-up for us. We were able to get our entry long at 5327, but soon after we entered our trade we noticed that price action began to stall and we closed the trade early at a 6 tick loss or 3 points on the Dax ($35/point).

We then did not see any good volume enter the market until after our morning break. Once we returned to the market at 7:30am EST we noticed volume had begun to trickle into the market again. At 8:42am EST we finally saw our opportunity to trade, this time in the Crude Oil market (Symbol CL). The trade set-up nicely with a 2-step pattern to the short side, we then looked to enter the market below 72.00. We entered the market at 72.00 and quickly began to watch the tape to see any follow through in price movement, which we got in the form of +3 ticks, +6 ticks and then our final contract trailing for an extra +3 ticks. We closed the trade with a total of 12 ticks on the Crude Oil ($10/tick).

The next scalp we took was off the Gold futures (Symbol GC). Once again price set-up in a 2-step fashion, which in these summer months of low volume we see quite often. We looked to take the Gold futures short below 967.3 and entered the market at 966 at 9:10am EST. We quickly got our first target of +3 ticks and then closed the rest of our contracts out at break-even.

Our fourth trade came again in the Crude Oil market (Symbol CL). Around 9am EST we began to see something very odd in the Crude Oil market, high frequency traders, which disrupt price movement by adding extreme volatility to the market stepped in and kept price movements above 72.00. We had to wait till after the US open before the Crude Oil market began to trade at a somewhat normal flow again. We finally saw price start to show us some patterns and we saw a chance to take a 2-step short at 10:40am EST. We noticed on one of our multiple timeframes that we had dynamic support at 71.60, so we waited for price to break that level with increasing sell pressure on the tape. Once this occurred it was time to enter the market short, which we did at 71.57 where we quickly got +3 ticks before price retraced on us and closed our trade with a profit of +3 ticks ($10/tick).

Our final trade came on the Crude Oil market yet again (Symbol CL). We originally saw a James Wave pattern setting up to the long side, but noticed it failed to conform to our trade rules. So, we began looking to take the Crude Oil market short with a 2-step pattern. At 11:28am EST we entered the market at 71.87 short after seeing price break a dynamic level of support at 71.93, we then took profits at +3 ticks before getting scratched out of the rest of our two contracts for a profit of 3 ticks ($10/tick).

Trade Total’s: 4 for 5 $75 in Profits!