Warrior Trading Blog

Another Crudetastic Day +$2,400 | Steve’s Futures Pulse 159


What’s up futures warriors? Trader Steve here, it is happy Tuesday, and happy indeed. I’ve got my green sweatshirt on, and it was green indeed. Two trades, two wins, light sweet crude as well as the gold futures market. Light sweet crude, we grabbed 19 cents from our average position to the downside for a nifty 2280 on the trade, and then we got a little cherry on top with gold for another $120.00. No too bad in about an hour’s worth of work.

Now I recorded all the action, and you’ll soon see lots of patience was required post entry into the trade to wait for the market to navigate its way in our favor. I talk through a whole bunch of things, and I hum a few little jingles for you as well. So enjoy today’s Futures Pulse, and I look forward to meeting you back at the markets next time, which is tomorrow by the way. Let’s keep it green this week.

I said good morning, and happy Tuesday futures warriors. If you’re just joining and logging in for the day, let’s get you up to speed.

Here on the gold market, we’re long on the gold, 1328.40, which is right about there where I’ve drawn that line. The first-tier target we’re looking to get here is going to be 1331.40, that would be for 300 bucks a contract. That’s right up here, and the reason we’re looking for that zone for some profit-taking is you’ll see we start to get into this congestion up above revealed by our market map.

That’s on the 10-minute chart, and over here on the 30-minute chart, which is the middle chart, you’ll see we get a steep, about a volume accumulation as well. Again, this is when we turn our volume sideways horizontally. We can see at what prices all that volume is aggregating. We want to grab our ticket at the meat counter and check out before we get into these zones, because what will happen is the market gets into here, it goes sideways, and many times will even swing a U-turn and come right back down, so we want to do our profit-taking here before we get to that zone, okay?

We’re just being patient here, again, long from 1328.40 market, you can see the quote up here is for the gold where I’ve got about $40 a contract in our favor right now. It’s just kind of bouncing around in and around our entry-point right now, all normal stuff, okay?

Stop on this one. If you take a look down below, 1324.80 on this one. That’s our apocalypse-prevention plan, as I like to call it. If all things go terribly awry in this trade, we’ll head for the exit at 1324.80 and that’ll put us down below over here, if you’re watching the 10, down below that POC level. That’s that aqua-colored line. It’ll also put us all the way below our low-value area at 1325.80 on the 30-minute, which actually I feel even better about.

Right now, the market’s back inside the value area, so it’s not ideal that it’s sitting inside these value areas between the red above the green. It means the market’s in a balance zone, it can navigate sideways there for a period of time, so we just need to be patient.

If we start to continue to see the market retreat off that supply area, obviously we’re going to look for a little help from POC and some of the historical value areas as well.

Got a decent bit of support down below here, and look at that master point of control, that yellow horizontal line. Do you see it right there on your TAS market map? Those of you that are using your TAS market profile can see this. That line right there, you can see it comes in right about 1326, I’m going to call it 1326.10, that’s your high-volume aggregation zone. Having that down below makes us feel good. It’s like having a big burly bodyguard, right? This is the part where we wait. This is the part where we wait.

I like to break down trades into little micro-milestones, I call them, which are short, achievable, tangible, within arm’s reach goals that help us kind of work our way towards our eventual goal of doing some profit-taking.

For this one here, you can see again because we’re down below that supply area, that’s that red line, the upper band of the balance area, and you’re also down below it over here. They come in very close and similar levels, 1328.30 over here on the 30, 1328.20.

The first thing I’d like, I’d like to see us get above and have a close back above that 1328.30 level, so that’s my little micro-milestone. It’s only two ticks away, so it’s very micro. I think how that helps me, and maybe it helps you in similar fashion, is instead of having this, oh boy, our first profit’s still $3 away. It seems like we’re so far away. I can’t see any kind of light at the end of the tunnel of taking some profits on this trade. It gives you like a little …

Anybody go to a concert, right? So you’ve got the big concert, and then you’ve got the little side stages, right? You take in a little bit of the show, you can walk right up to the stage typically, and then still the ultimate destination is to get to the main stage and take some profit-taking in these markets. Again, we’re going to just try and have that micro-milestone here, another seven minutes and 30-some seconds here to see if we get that close back above 1328.30.

I like the navigator. The navigator is one of the big reasons here why I like playing the gold on the upside here. Look at our trend exhaustion warnings, that’s those pink/magenta color bars here.

The reason I like the way … what we’re seeing out of the navigator right here on both the 10 and the 30s, look, we’ve got those exhaustion warnings on the prior downside move on both time frames, which means in reality, the fact that the market is kind of exhausted means the probability is may very well and more likely to favor, at least in the short term, a possible uptick here in the market, and that’s what we’re looking for. We’re looking for the market. We’re not asking a whole heck of a lot out of the market, we’re looking forward to making a little run for a few dollars towards this congestion zone, and if it wants to fail after it gets up there, by all means, it can do that all it wants, hopefully after we’ve punched a ticket at the meat counter for a victory. We’ll see.

In the meantime while we’re waiting for this trade, I’m going to do our usual scans of some of our, what I like to call, usual suspects here. There you go, okay. (silence)

You can see E-Mini S&P going into breakdown mode. This should, in theory, help the gold trade to the upside here, but a good-looking trade on the S&P for the short side here.

Look at exhaustion warning here, I’m starting to see that downward point of trajectory on the 10, so for those of you on the E-Mini S&P, especially if we can clear this zone here. Look at 2895, which is about five points lower from where we are right now. It really starts to open up down here. You see a tapering off of the volume, and remember, that’ll be an area where the market will tend to pick up some speed. You’re starting to move into that zone on the 10-minute here already, so it’ll be interesting to see. The S&P is still up 10 on the day but retreating off that high from earlier in the session, 2911 and a half, okay?

The key area I see to watch here is about 2895 zone. If we start penetrating down below that, I think you’re going to see the market pick up steam and you’ll likely see a long-range bar to the downside, okay? So a short directional bias is what we’re watching there. (silence)

Let’s go take a look at the crude oil. There’s light sweet crude up 30 cents here to start the day. It’s starting to go into breakdown mode here on the 30, however take a peek here. We’re around the cusp of the 10, possibly going into breakdown mode right on that 5350 zone as well.

Crude again has some potential for the downside, some bias down below, because look, you have that exhaustion … not exhaustion, volume accumulation up above, okay? You see how you see all these lines that extend furthest to the right, but that’s above where the market is right here. That’s going to favor the short side, so it’s either that or trading these time frames. Not a bad idea to take a little look-see at the crude oil, which is following suit with the E S&P here. You can see this thing sell off. It’s still up 25 cents on the day, but I’m seeing it kind of even break down to this 5320 zone, that’s 30 cents. If it clears that, you could see it down even a bunch more, so that’s going to be an interesting place to watch here on the crude chart, okay?

Still in the long gold position down just a smidge on that one right now, nothing to get too excited about. I’m looking at this crude oil here. Crude oil looks like it may be ready for a drop here, so I’m just going to gear up here. That’s going to be symbol CL and nine. CL and nine, I’m going to get on the short side of that crude and there we go. CL and nine, I’m short 5348. Short the crude, short the crude, okay? You’ve got CL and nine, I’m typing it up as fast as I can here, 5348 I’m short. Short in the crude and short in life. Not short in quality of life, maybe height, five foot nine and three-quarters of an inch. Don’t forget to give me the three-quarters of an inch.

All right, we’re going to put that stop. I’m going to put it … in this instance here, I’m going to put this just a little bit above that master point of control up here. It’s going to go at 82, 5382 is our stop on the crude, 5382, okay? I’m giving it to you verbally here so you can get your orders in, if you’re doing anything with me here today.

Let’s run the math on what the risk is on this so you can calculate it, so it stopped at 82, entry is at 48, that’s 34 cents you’re looking at here, 34, times that by $10, of course, it’s going to be this number. There we go, $340 per contract. That’ll be our risk on this trade, and away we go.

Buckle up, it’s a wild ride in the crude oil. Not for the faint of heart. Not for small children or those with high blood pressure. (silence)

Just sold six more of the crude, so I sold six at 48, another six at 54. It’s going to give us that break we’re looking for. That’s going to bring my cost average up a little bit here. As you can see, it’s going to bring it up to 51. Same stop at 82.

All right, I’m going to type this one up here for you guys so you guys can see what it looks like visually. The market’s back inside the value area. I’m not thrilled about that, but we’ll see how she shakes out.

I’ll put the average price in here right now. We sold 48 and 54, so average comes in at 5351 for tracking. Anything in and around there is going to be just a smidge down below that 5361 level. What you see is that, if you watch my screen over here, that’s that demand zone over here, okay?

A key area I want to see is then get down below 5345. If we do so, I’ll be a happy camper, okay? Initial stop at … so it brings our cost average up on the position, so that helps our risk reward here … I mean not risk reward, our risk on the trade of $310, so down just a little less, okay? There you go. Okay, cool. Everyone can see that?

Ratio is not the reason in this trade, but ratio always … this and any trade … is kind of a fine-tuning timing tool. It tends to do best at identifying counter-directional bias trades, so you see how the red line down here is crossing down below the blue moving average line? That’s generally going to be a decent little turning point, at least for a fine-tuning timing tool, but it should not be used in precedence to the combination indicators like the navigator and of course, the boxes.

Gold is kind of stagnant right now. It’s not really going much of anywhere, hanging right around our entry point, just above 1328. Crude oil, not our friend so far.

While we’re waiting to see what kind of shakes out here, both in gold and crude, a key area to watch also, look over here on the crude oil is if we can get down into the bear camp down below this 5360 area. That’ll put us in the bear camp below the demands that are on a 30. Love to see this thing work its way down to 50 to 92 where you see it there. That’d be a beautiful thing.

First things first, micro battle. We want to see some closes. I’d like to see some closes come down below this set of boxes, 5353, where I’m drawing this yellow line in the middle of the chart, right there. I’d like to close down below there. That’s the little micro-milestone I want on that one.

Let’s go take a look at copper in the meantime. Nice little breakdown trade occurring here. A few things I like about this trade. For me, it’s not going to be … I’ve got the two positions right now I’m going to continue to manage, but I do like the short sale and short bias on this one.

Look at the little pocket hole that you can see, that volume gap hidden there between that little open alligator’s mouth right there. That’ll tend to favor market moving vertically through that to the downside, so I like that we’re up kind of a little top heavy here on navigator and it’s starting to give us that pointing downward. We already broke free on the more sensitive 10-minute time frame over here, and a lot of room down below on the 30, okay? I like the short side there. A good find on that one, Janice.

Let’s go take a look at the currencies while we wait for some things to shake out in both the crude and the gold.

Here’s the Australian dollar. This one’s got some disconnect. There’s no confluence underway here, at least at this time between the 10 and the 30. You see, look, we’re in breakdown mode on the longer-term 30 and you can see the 10-minute chart is trying to muster up a break to the upside. (silence)

Squeaky chair. Squeak, squeak. See if we can’t squeak some profits out of this market today, what do you say?

Let’s go take a look at the Canadian dollar. I’m just going to do a quick scan through the currencies.

Here’s something to pay attention to. Look at how long these levels have remained intact. See that 7534 level right here? See how long that’s remained intact? That’s something to be on the lookout for. When you see those value areas, or what we call TAS boxes, they remain intact horizontally for a long period of time. It makes those levels more significant.

What do you think I’m going to tell you here, those of you that are my savvy TAS market profile users? What am I going to tell you here? Well, we’re already in breakdown mode on the 10, so we already have that bear’s directional bias on the 10, but if we start closing and testing the waters down below 7534, that’s that bottom green line on the 30, look at all that space right there. It’s like a cliff dive, wooooo. Anybody cliff dive, by the way? Speak up! If so, take a bow. You’re braver than I am.

You know, I’ve a grandmother. My only grandmother is still alive. She’s 92 years old, and she skydives. Don’t ask me where that came from. Just in recent years, she started having a fancy for skydiving. Yes. She lives down in Arizona, and enjoys climbing thousands of feet in the air and jumping out of a plane with a little parachute on her back. Talk about fearless, holy cow! That’s pretty cool. Go Grandma, wooo!

Anyway, so the fact that these levels remain intact for as long as they have, look at … there’s also overlap here of … look at right here. Look at all this congestion here. Look at all this congestion here. Look at how long that level has remained intact. That could be a nice little short sell down here, okay? Wait for the market to get down there, 7534, about five points from where we are, and then boom.

I do see that gold is starting to creep up. I’m seeing a little green on my screen. I’d like to see a little more green on my screen. A lot of green, like my shirt today. That’d be nice.

I’m feeling a little bit better than yesterday. Thanks for those of you who hung in there with me yesterday. Over the weekend on Sunday, went and spent some time in the freezing cold drizzly rain, and paid the price for it yesterday. I wasn’t feeling so hot.

Kind of funny. I’ll tell you another story as we just continue to work on our patience here. I had some landscaping being done around the house, or the yard I should say, not in the house. We don’t landscape the inside of our house, contrary to popular belief, and they hit our cable line so they knocked out 10 TVs. From last night about 5:00 late in the day to this morning, you would … it’s so funny, you know these kids grow up in this digital wi-fi, always-connected TV, instant this, that and the other. You knock out 10 TVs and it was like a panic attack. From my wife to my three kids. They’re so used to having their devices all connected on the wi-fi and watching all their favorite stuff, and I actually found it quite … maybe refreshing. A forced break from … well, at least cable. I mean obviously, you’ve still got cellular receptions and stuff, but a forced break from at least wi-fi.

Now, I didn’t tell them intentionally that I’ve got mobile broadband that I was hooking into to still be productive and I was working on my laptop last night, but shh, they don’t need to know that. Thankfully my business internet is a dedicated line, so no problem here.

So we’re right at break-even here on the gold. It’s like we just started. Down a little on the crude, down about $100 per contract there.

Let’s keep moving through these currencies, then we’ll circle back on our trades here. Keep an eye on the euro. The euro has some possibilities here as well. This has some definite possibilities to the short side. Little different levels you’re going to be watching there. You can see 113.19 and here it goes. Watch the euro. It could be a short sell. Look, we’re about ready to bring into the bear camp over here. About ready to break to the bear camp over here. Actually, on both these here, you’re in the bear camp.

It’s a little … about the only thing I don’t really like here, look at the 10-minute chart. It’s a little eh indecisive, bouncing around on the zero balance line. I really would like to see that thing get top heavy a bit more and then we get the break. That’d be my preference, but you can’t win them all and you can’t … you know, we’re not always looking for moons alignment perfect trades on each and every one of these, but this would favor … this is going to favor, especially we can start to break and stay down below, the 113.15 zone, which is a few points from where we are.

A good little slip-and-slide possibility here, a nice little slip-and-slide possibility on the 10. The market’s a little … again, you’ve got a lot of congestion up above across multiple time frames.

You guys starting to understand what we’re looking for, or what I’m looking for? Looking for all this congestion, back to back congestion, congestion, right? Got a little boxcar set up, right? Remember how that works? When we have congestion here, here, here, basically very close areas, and of course, put the wheels on your boxcar, right? So side profile of a train, and it just means that over … in this case over the last 150 bars, because each one of these is 50-bar increments, so that means the value area has really not budged a whole heck of a lot here, okay? This is on the euro.

Let’s go take a look at the yen. Keep an eye on the yen, especially if we can break free above the 92 … call it the 92.15 area up here, it starts to open up, it starts to open up. That could be interesting for the upside. Here’s the Swiss. Swiss is in breakdown mode. Too far away for it to really be doing anything.

Let’s move over into the grains. Here’s corn down a nickel. I’m going to take a pass on this one here. Disconnect between 10 and 30.

Here’s the wheat down a penny and a half. Bullest direction of bias is still intact here on both the 10 and 30, but we’re back in value on the longer-term 30. Remember longer-term time frame always gets the right of way, so if you’re looking at two charts … we’ve got a left, we’ve got this 30, or I’m sorry, 10, over here we’ve got 30. You can see I’ve circled the time horizons. When they disagree, you look at the longer-term time frame. It’s likely to ultimately get its way, win its way, which is kind of like me and my wife, so if we disagree, your best bet is to go ahead and side with my wife, because somehow, some way, she knows how to get her way a heck of a lot better than I do.

There’s some skill … I think there’s some skill they pull aside, either little girls or young ladies, as they work their way through the school system, and there’s like a secret class and I think it’s how to persuade and get what you want, and they’re very effective at it. I don’t know what it is. I’ve got two daughters, as many of you know, a lovely wife and they don’t hear “no” from these lips very often. I mean, it’s got to be really bad for me to say, “No.”

Here we go! Crude’s going to give us that break now. Gold is starting to come back. We’re in the green slightly on that. I like where the crude is trying to be, it just needs to do its thing.

Let’s go back to the crude, because this is where we’re about ready to have some fun, ready? That’s right. You know it. It’s a family favorite. This is the song that doesn’t end. It just goes on and on, my friend. Some people started singing it, not knowing what it was. They’ll continue singing it forever just because it is the song that doesn’t end, and you just keep singing it. Yeah. Terrible, terrible, I know.

Time for a little sip of coffee.

Okay, type in the chat if you’re a coffee drinker, type coffee or java. If you’re a tea drinker, type tea. If you’re good old-fashion H2O, type in water. What’s your favorite … maybe a little bit of what time of the day, it depends. Maybe some of you sprinkle in a little bit of everything. I’m a coffee. I’m on a coffee kick.

I’ve got to tell you though, as the weather gets warmer, I do switch over to the iced coffee for a little pick-me-up in the morning. I’ve got to tell you, I’ve got to get back on the green tea, man. There’s so many awesome green teas, and there’s something that green tea does to my body, which is just … if I switch coffee for tea … tea for coffee … no, the other way around … drinking tea, get rid of the coffee, I like lose 10 pounds. There’s something amazing about that. Tea, it’s just fantastic. It’s the wonder liquid, and I don’t do anything different. I just start drinking the tea. I ought to do that. I’ll show you maybe. It’s summertime. I should probably be thinking about these sort of things here, almost summer, right?

That’s a good one, the apple cider vinegar. Oh, that’s so … man, that stuff just bites the back of my throat though, but that is darn good and good for you, they say, if you can choke it down. It is a pungent beverage.

All right, we’re just sitting here being patient. We’ve got these positions that are just bouncing around a little bit. A little bounce here, a little bounce there, here a bounce, there a bounce, everywhere a bounce-bounce. Old McDonald had a farm … you can tell I have kids. Everything like somehow ties into a nursery rhyme. The curse of parenthood right there.

All right, come on now. I won’t stop you. If you want to go ahead and make that move for me, I won’t stop you, I promise. (silence) Patience. Patience.

See we’re down below. We’re in the bear camp. You see that over here, those of you got your TAS market profile? Those are static price compression levels, static PCLs is what I have in this side over here, and what this allows us to do remember is it identifies that neutral zone where the market oftentimes will move, what I call rotational moves, kind of like this, it just kind of hits the wave in between there. What we’re looking for is that once it commits to moving south of that bottom aqua-color line, a good chance we’ll make a run down towards that S-1 level, support level one, and then if it clears that, level two, level three.

So it’s down below that, ever so slightly right now. We just want to see that conscious effort and move lower. That’s what we’re waiting for. That’s what we’re being patient for. (silence)

AJ’s got a good question. Is there something that’s kind of similar to Tradovate, which is compatible with TAS, but it does options and stocks along with futures for a small account? Trade Station. That’s your best bet. That’s a good solution for you. We’ve worked with them for over a decade; platform, stocks, futures, stock options, compatible with TAS. Good to go.

My broker over there is Mitchell Field, if you’re looking for a name. Mitch Field out of the Florida office. Tell them Trader Steve sent you, then start going … I feel good things happening. Here we go. Some people started singing it. I don’t know why that’s stuck in my head. Don’t ask me. I just work here.

[Robert Ross 00:32:42] he puts me in this box here. Oh gosh. Here we go. I’m out, just like that. That was the move I was looking for. I have covered. I’m feeling good. I’m happy, oh so happy. Covered at 32. Nifty, nifty, on 12 units. That’s 2280 on the trade, 2280 on zee trade. Oh so happy.

Still got the long gold now. I’ve only got six units there. Out of the crude. Remember we cost-averaged that thing up to 51, so getting out at 32, 19 cents. That’s $190 which ain’t bad. We had to be patient for that one now, mind you. We were waiting, waiting, waiting, but we got the break we were looking for. It’s a beautiful thing. Remember our cost average entry was right here on the light sweet crude. That was 5351. Patience, patience, patience, and then boom! Filled down here. We got aggressive around the POC here. Still could have a little bit more downside, but I’m not going to be greedy today. I’m going to go on and take my money and run, 2280.

I started with six units at 48, added six, remember, higher, bringing my cost average to 51. Market still out of balance in favor of the bears, so anybody that’s holding on, a runner rate now. Again, you’re still feeling okay about the short side right now. You should be moving stops here, back inside that 5345 zone. Lock it in a little bit better than your entry point. Right now you’ve got a free trade, compliments of Trader Steve.

Who wants the air drums? Gosh, this sure beats having a regular job, I’ll tell you that much. I’ve had plenty of those. I could give you a funny long list of jobs I had before I got into adulthood. Let’s see, I worked at a pizza place, I worked at a toy store. I worked as a sink polisher once. I used to drive a forklift at one point, setting up concerts. I once had a part-time job working in a liquor warehouse, yeah, mm-hmm (affirmative).

What else did I have. Oh, I worked at a lumber yard in college throwing big, huge 16-foot pieces of trim. That’s how I got buff in college, and then of course I got serious, I got smart, got edu-ma-cated and got into finance, trading, investing, all that fun stuff, and I landed myself here in Chicago 20 years ago, almost 20 years ago, and the rest is history. I’ve been swallowed up by the trading industry and it has not let me go since.

Yeah, I used to be a sink polisher. Oh, that was a terrible, terrible job, let me tell you. It paid well, relative to the time frame and the skill I had to deploy to do it, but boy oh boy, it definitely hurt my hands. You’d hold this sink and zzzzz until your hands would be all numb almost. Terrible.

Watch the gold here. It’s starting to make its break here to the upside, 1328.50. I’m long six units on this one. It’s starting to make its move a little bit higher here. This one I’m going to keep a close eye on here because I’ve got a little thing that you know is super important to me. It trumps any initial risk, initial stop, trailing stop, time-based stop, and it’s called a life stop, so I’m outtie. I’m going to be getting out of my gold.

We did well today largely on crude oil. I like the long side, so if you’re going to still hang in the trade, it’s okay. You’re going to make a first run stop towards 1329.80 here. If we clear that, that 3140 is still going to be intact. Remember, we’re long from 2840, long from 1328.40, 3140, $3 higher, still intact if you want to hang in there on the trade. For me, life stop kicks in, something I talked about in one of my earlier videos.

There’s three different stops I run; one’s of course a tangible price-based stop. Once the market goes to a certain price against me, or whatever, I’m out. If a certain amount of time has passed, the move was expected to happen at an earlier time and it didn’t, I’m out of the trade, and then last but not least, life stop. I’m out of here. I’m going to go to the pool.

All right, cool. I’m out. I covered my gold. It doesn’t mean you need to. Remember, the goal is not to mirror trade, it’s to learn what you learned here live with me about strategy formulation, identifying chart patterns, deploying a strategy, managing risk, improving risk and heading for the exit when you’ve got another green day, and we do that today, 2280 on the crude oil. I grabbed $120 out of the gold today, and we’ll take it. Two green trades, over $2,000, and what time is it here? Nine forty-five Chicago. I’m going to go to the pool with the kids. What do you say?

All right guys, enjoy the rest of the way. Have some fun. Chat it up. Find some opportunities. Talk to your TAS. Share your ideas. Trading’s a lot more fun together than alone.

So long, everybody! Trade well and you’d better be well.

Hey, I see you there. If you enjoyed that video, give me a thumbs up and leave a comment down below, and be sure to subscribe for more great videos just like this from Warrior Trading.