Warrior Trading Blog

Balcony Day-Trading with Family +$1,200 | Steve’s Futures Pulse 178


Hey what’s up, fellow traders? Happy Friday, TGI Futures, as I like to say. As you can see, I’m not in my home office again. I’m on the go. I’m actually enjoying a little bit of the Michigan harbor here with family. I stepped outside on the balcony, as I told members yesterday I was going to do. We grabbed $1200. That’s right. Grabbed a dollar out of the gold in a breakdown trade that we saw come to life. So today’s Futures Pulse, I recorded all of the action, and I’m going to let you watch it so you can see how I made money sitting over here enjoying my family, enjoying the outside. Now that’s how to go to work on a Friday. Enjoy the Futures Pulse, and I’ll look forward to meeting you back at the markets on Monday. Until then, trade well and be well.

Okay, we’re in business, traders. As you can see here, I’m at the beautiful Michigan harbor here today. This is a little retreat about an hour from home that a few times, I like to take the family here and enjoy the calm that only a harbor can provide. Lake Michigan obviously a huge, one of the big Great Lakes, obviously, that comprises … 21%, actually, of the Great Lakes. I actually saw that, we were at an ice cream shop yesterday. 21% of the freshwater on the planet, holy cow, that’s a lot.

Hey, let’s talk a little bit about markets, though. We got work to do here. S&P’s breaking down right now. This is the area I was watching earlier on my charts, 30-03 and a half. You can see it right here, that bottom demand zone is breached, okay? 30-02 and a half. I’m watching the down side here. Still looking at my 30, you can see on the chart over here. We’ve still got a little ways to go. I’m going to squint every once in a while and put my head on the screen. There’s a little glare here. Oh, the problems of trading from the balcony.

The bottom demand zone on this one comes in a little bit lower, 29-98 and a half. Let’s keep looking here. I want that … That’s the area. I want to see that thing get back down 3,000, and we may have a taker at that point.

Let’s look at NQ real quick here before we leave the index products. Here’s NQ. Same thing, you’re seeing a quick turn-around and breakdown in this market. It’s a busy harbor back here, so every once in a while you’re going to hear some fun noises passing by.

Here she goes. Here’s the NQ. This one I like even more, actually, because you look at you’re in breakdown mode on both the 10 and the 30. This one just breached moments ago. Our demand zone you can see coming in right here. It was at 39, 39-39 half. We’re starting to break down into that smooth sailing zone. What I like is over here on the 30, if you look at my chart, I’m going to zoom in a little bit more here. There we go. There, you see how we’re starting to break down over here on that demand zone as well? This is why sometimes I like to, when I’m on the index products, if I’m looking at the eMini S&P, I may also want to look at something like the NASDAQ, or the DOW, because sometimes the chart pattern is just more promising.

We’re going to put NASDAQ on short watch to kick off the morning here. Okay, let’s take a look now. Let’s move at some of our other usual candidates, like how about gold. Let’s take a look at that gold. All right. This is August contract gold. We’re going to fire it up. …

This one, we had a big two back to back long range bars here on the gold not too long ago here. We’re loading up the analytics. Here we go, three bars in a row, but this one’s retreating. Pay attention here how you have that plywood support down here. Notice I got these two levels, the POC and the demand zone down below here. They’re pressed up real close to each other, so if that gets breach, that’s going to be a big deal for the short side on this one.

30 minute time frame remember gets precedence on our 10. You can see that over here, 30 minute time horizon. You got that downward pointing push trajectory on navigator. Again, the key area you’re going to watch is that bottom demand zone. That one comes in, let me see, put my cursor right on it there. 14-35-40, which is very … actually, it’s the identical same level as we see over here on the 10. Okay, so we love when we see that perfect alignment across our time frames. Watch, if we go into breakdown mode at that level right there, short watch there as well. So we got short watch on the NASDAQ, short watch also on the gold.

Let’s go take a look, pardon there’s a little wind out here today. Problems, right? Aren’t these just terrible problems to have? Here we go. … Hold on a second. Let’s get into … I want to take still like look at August here, so CLQ one nine. … I’m trying to [inaudible 00:04:56] … so you don’t have this in your ear the entire time. Here we go. …

As you can see, we’re in breakdown mode, no doubt about it. We’re short bias on both our 10 and 30 on the crude oil here. You can see, it’s easy to see with your TAZ vega indicators, but you can see 55-70, and then 50-55-82. Those are those demand zones on the 10 and the 30. We’re in breakdown mode on both, so we’d be in short watch also on the crude oil. It looks like we’re sizing up to possibly have a short side position here today, but let’s keep scanning through some of our usual suspects.

Okay, looks like that one should be on short watch, too. So we got gold, NASDAQ, and the crude. Some of these are probably already on your short watch.

Okay, let’s go take a look at our Chicago wheat. Look at that September contract here, big break out to the upside. You can see on the 10 minute chart real quick on the quick load, even without the analytics firing up here. Those will populate here in just a moment. You see the big break to the upside on this time frame. You got three, four consecutive bars, nice strong bars. On the 10 minute, we’re back in balance, but look at how when we look for reinforcement on should I get into this trade, I often like to look at that 30 minute time frame because sometimes remember, the shorter term chart can be a bit noisy. It moves in and out of balance more frequently than what we’re going to see out of the 30.

If you draw your attention over here, let me back it out just a little bit here. Look at all the space up above. You see how this market is actually breaking above all this congestion on my chart on the right there? Okay, and it’s staying above it. It’s pulled back just a smidge here, just a bit. It’s sitting kind of like on a little shelf of support, right? A shelf of volume accumulation. We like that upside. You see how there’s a lot of space to the back of the chart up there. That’s what we look for in a trade.

So again, when you’re … if you’re doing multi time frame confluence, I know some of you go shorter term. You’re doing fives and 15s, I’m doing 10s and 30s. Some of you that are swing time frame traders might be doing something like the following, 60 minute and four hour. Same thing. Same technique here, doesn’t matter. You’re giving precedence to the longer term time frame, always going to carry more weight. If you’re like ah, do I do it? We’re back in balance on the 10. So you’d be a long watch on the Chicago wheat here this morning.

We’re going to take a look at soybeans as well. ZS, and we’re going to look at November contract here. Then we’re going to take a peak at corn. Then we’re going to take a little look at 30 year treasury bonds today. Look at the 10 minute chart, we’re getting some containment up above. Pressure point up above, because that congestion we see on that 10 minute chart. Then, you can see we’re still smooth sailing here on the November contract on the 30. You can see we’re up above the supply area, and really not a lot over the last five bars, keeping the soybeans from exploiting higher prices. I don’t want to chase, this one’s too far away. We’re not in a good inflection point for my standards, okay?

You’re getting part of the wind here. I’ll go on mute as often as I can. …

Multi breakout on the corn. You can see we’re in bullish breakout on the 10 and the 30. I like where this one, this corn is sitting, just above that shelf of support down below. Again, that volume accumulation, all those three levels, the red, the aqua, the green line down below. Those are, if you put your stops opposite of all three levels, remember, we call that putting your stop across the highway. That’s a good place to think about putting your stop on a trade like this. It’s got the bullish characteristics on the 10. We’ve got the bullish characteristics on the 30. This one again, should be on long watch for you today. Got a couple on the short. Now, with the green’s giving us a couple on the long watch.

Let’s go take a look at bonds here. All right, let’s go Z, symbol ZB. We’re doing September here, U one nine. Some friends walking on the boardwalk there. … They know where to find me right about this time, sitting out here when I’m in town. They know [inaudible 00:09:06] … to find me up here on the patio. …

Okay, we’re in short directional bias here on the 30 year treasury bonds. You can see on both the 10 and the 30, on both the 10 and the 30 you can see we went into breakdown mode earlier. When you have your TAZ vega indicator activated, as many of you do, remember that’s easy to identify because you’re going to have bright red color bars. It takes over the coloring of the price bars that you see right here. It makes it red when you’re below the value area, below that green demand zone as opposed to just net down like traditional bars on your bar coloring. Net down will be red, net up on the bar close green, but what we do here with TAZ vega is again, we make it in sync or we take it over and make it relevant to market profiles.

So when we’re breaking above, I click back over here on the 30 minute charts. See green, green, green, green, four greens. That’s when the market was closing above the supply area, so you want to be kind of that bullish state of mind. When we start seeing a lot of red, that means the market continually is testing the waters to the down side in the bear camp, okay?

What do you guys got for weekend plans today? What are you guys going to be doing today and this weekend? It is the hottest day of the year here in Chicagoland and surrounding. I’m not in Chicago, obviously I’m in Michigan on the coastline here. Not coastline, whatever on the lake shore, if you will. It’s the hottest day of the year. Today it’s going to be like a sweltering 110 after you add all that humidity, and the dew point’s going to be just crazy today. We will definitely … be in, around, and hopefully fully consumed in water today. I think water’s so therapeutic. Any swimmers with us here? Any of you guys like to swim? Yeah, it’s great. What a great exercise. Swimming’s one of those things that you don’t even realize you’re getting exercise as you’re doing it. Isn’t that cool?

Okay, cool. So let’s get … let’s go take a peak or so. We’re going to put bonds on short watch. It needs to break a little bit further down below some of that congestion. You see the key area I’m going to watching, 154-26 on that 30 minute time frame, and 154-20 is the demand zone on the 10. So if we can break down on either of those, we’re going to feel decent about a short side position here, okay?

All right, let’s circle back here. Let’s take a look at the eMini S&P. Anybody hang in there on that copper yesterday? Remember, I cut bait on that thing, ended up taking a small loss, just $50 a contract, 20 points. $2.50 a contract. It did, I see a second … there was kind of a secondary break on that after I was done for the day, so I was just curious if anybody had hung in there and leveraged that. Anybody do that? Mm-hmm (affirmative).

Even the water warmed up. It’s so hot this morning here. I have some water there. The ice is already melted. It’s probably lukewarm at best. It started as ice water. Again, don’t you love hot summers? …

Okay, I’m just watching the S&P here. Now again, we’ve pulled back through. Let’s talk a little bit about this bar here. This has nothing to do with TAZ market profile, but see how this bar was a long range bar to the down side? It closed near its low here. Let me zoom in a little bit for you here. It closed actually, looks like almost perfectly on its low. Remember when we talked about that?

So when you see these long range bars where the close is at the extreme, near the high, near the low, or perfectly at the high or low, remember the natural inclination of the market is to slide back through where it’s comfortable; kind of like considers that home base, if you will. That’s exactly what you’re seeing. Look at the open on this most current bar here near the low. Of course, because it just started out. Then, it started slipping sliding back higher.

I call it slip and slide. You’ll never find that terminology in any classic technical analysis book, but it’s my way of helping you remember what that technique is all about. Okay, I’m going to rewrite the book. Maybe rewrite the book, you’ll have a glossary of terms, trader Steve style, so you can understand what the heck I’m talking about.

I always told my students over the years; I’ve been at this a long time teaching traders, and I said, “Would you rather know the academics, or do you want to make money?” I’m here to help you remember these things. Okay, and don’t worry, it’s almost like I got to go filter, do all the academics for you. Trust me, I know all that classic, most of the classic technical analysis. I didn’t get into a couple of areas, just by choice, but I know the classic technicals as well. I may call it something different. I may present it with an analogy that helps you remember it, but we’re doing basically a combination here.

Remember, market profile? All along here, market profile is just our way of gathering up those key support and resistance levers. That’s really what it is, and volume aggregation zones, and leveraging those to our benefit.

Okay, so there you go. It’s almost kind of a mirror image there, that bar. Look at that, okay? So we closed near the high. We started on the low. Previous started near the high, near the low. This one here now is back above the POC, master point of control. We’re not going to touch this one here, okay? I’m glad we didn’t here. I’m glad our patience is in order here, okay?

Let’s go take a look here again. We’re going to go back and take a look at that August gold. … This sounds like a lemonade day to day. It feels and sounds like a lemonade day, just a big old homemade lemonade. In fact, I saw some kids yesterday. They had a lemonade stand on the other side of the little boardwalk over there, so maybe need to hit them up; little entrepreneurs in the making here.

Okay, so we’re watching the 10 and 30 here on gold. Look where we are here now. Okay, the prevailing direction of bias is breakout mode long. You can see that because look at the most recent breaks to the upside. Now just because they both have pulled back down inside the value area doesn’t mean we’re done with the trade. The thing I don’t like about a long side trade on this one-