Warrior Trading Blog

Happy Toes Crude Oil +$1,610 | Steve’s Futures Pulse 208

Steve_9.6

Hey, what’s up fellow traders? Happy Friday. TGI Futures as I like to say. Okay, I’ll cut to the chase. I know you’re wondering, is the streak still alive? You bet it is. 11 consecutive green days, still intact today, thanks to the light sweet crude. We also had a trade in the silver that was a scratch, so no harm, no foul. But there’s only one problem as you know, I only have 10 fingers, well hopefully. So I’m going to have to show you my toes. Here we go. Let me get down here. All right. Enjoy the Future’s Pulse video. I hope you’re learning a lot and meet me back at the markets on Monday. Trade well and be well. Enjoy your weekend, so long.

Okay if you’re just tuning in here, so far, just two trades on Friday. The first was a silver trade. let me bring up the silver chart to talk you through what I saw, why I added and why I called it quits at scratch on this one here. So if you take a look here, the initial, we started to see this market build this volume accumulation zone up here. So we initiated short positions up here, 1872 here in anticipation that the market would perhaps give us the break we’re looking for down below the 1867 zone. It never came to life. You can see the market kind of rejected off that demand area, that’s that green line right there and it’s been really largely contained inside there so when the market pulled back up here, I did add to the position at 77. So again short at 72 add at 77 which brings the cost average right here in the middle to 74 and a half.

And then this market’s just been sideways ever since. So I did make the decision to cover that 74 and a half, so nothing gained, nothing lost on that silver. Then we turned our attention over to the crude oil and this one’s still at large and I’m going to get you up to speed on this. This is October crude oil and this one in kind of juxtaposed manner, we started to see volume accumulation in here. And what was interesting on this just moments ago is that this master point of control, that’s that yellow line which delineates and shows explicitly the level that has the highest volume price, okay?

So where that yellow line extends from left to right, if you draw an imaginary line over to the right, that’s the highest volume price. You could see right now it comes in right around 5523. But earlier it was up around 5545. But so as this volume was kind of going sideways here and the market was not breaking free, this level shifted from what was up here to down here and that’s what made it go time for us to think about a long position.

So combined with the fact that we were also moving into this volume hole on the 30 minute time horizon, we were just above this 5539 POC level. That’s that aqua color line you see here. So the initiation of a long position came in at 5540 which I’ll draw a line here, right there, and then it’s just above, just a tick actually above that aqua line over here on the middle chart. Market started to give us that break we were looking for and it came up here and started knocking on the door of this key 5556 level. Again, that’s that red supply area up there, but until you break above that, that’s going to be resistance. So when we started to knock on the door, that retreated off at a 5551 which is right there, that’s where we ended up taking profits on 11 of 12 units, which is 11 cents.

Obviously on that one you could see this is activity. You could see basically zero, nothing gained, nothing lost on silver, bought six, sold six, and then a 1210 out the door on the crude, but still one final unit, that 11th contract that’s still along. And yeah, I do hope it makes the break. And in fact, as I am talking right here, look at the chart over on the left, we’re knocking again on the door of 5556 here, alive. And if we break above there, I expect we could pop right up to that 5580 zone pretty quickly potentially. So that’s an area that I’m watching to see if we give it a nice little pop to the upside.

So keep an eye right here because what happens here and what we’re doing with market profile is we’ve identified the, I call it rush hour traffic here, the congestion zone and just like in rush hour traffic, when you hit that part of the road where there’s not so many darn cars on the road, the market can put it’s foot on the gas just like you can when you’re breaking free of well Friday afternoon traffic, right?

So let’s see if we could do that because this is that zone right here. This is 5564, see where I’ve drawn that little yellow line. That’s the high of this bar right here. So what I’d like to see happen here, and it may very well happen right before your eyes here, we’ll see, is the market breaks above the 5556 level, which is that top red line supply area. That’s called Taz Dynamic Profile or Taz boxes for slang. But then if we break above 64, I expect we’ll see the market slide through this long range bar, which you see right here. And again, I don’t think it’d be overly optimistic to expect a 5580 if we get the break above that 56 and then 64 level, okay? So that’s what I’m looking for on that final unit.

Stop on this one’s at 5519, which I’ll draw a line right here. So should the market work it’s way back through all this congestion down below that master point of control, we get back $210 on that one. But again, being up over 1200 on the lion’s share of the position, it’s going to be a win I guess, no matter what. So it’s a low stress situation to have the trade right now.

You can still see there is a little hole here, okay and this is what’s revealed by your market profile and your Taz Market Map. Congestion’s right here. Congestion’s down below and then see in between you’ll look where I put a big X, there’s a steep fall off in volume. And when the market moves through these zones, time and time again, you’ll see it give fast and vertical bars. Long range bars like this and that’s what we’re watching and looking for here on the chart.

Long one unit still from 5540. Looking for 5580. Stops at 19. Just a friendly reminder, everything we do here is for strictly for educational purposes only. Nothing I say, do, or you see on my screen is a representation of anything you should do and it’s certainly not a recommendation. This is again a learning opportunity in line markets for you and that is the extent of it, okay? Please trade responsibly and remember past performance is not indicative of future results.

Here we go. Markets knocking on the door of 5556, watch it here you’ll see it turn bright green. That’ll be the Taz Vega indicator taken over the coloring of the price bar, making it real slick to see bright green. So you start getting in that bullish state of mind. Look at the steep fall off in volume here. See as I draw the area, see how it really falls off. It’s like you’re looking at a kind of a cliff there, but in this case it’s a cliff that would accelerate the market higher if we get the close up above 5556. Right here, this is the area we’re looking to see the market make some penetration through.

Here’s the quote. If you hadn’t figured that out just yet, in the top left, here’s the quote from light sweet crude. Over here is a 10 minute chart. Over here is a 30 minute chart. This is again that hurry up and wait part of the equation as a trader. Sometimes we do our analysis and we’re going through our process as quickly as we can, because these markets do move swiftly, but then you wait, there’s nothing for you to do other than to be patient. Markets again, knocking on the door, watch it right here. You’ll see if you get that fast and vertical price movement. We’re again, two cents off the pace. Look at it. 5553, this supply levels at 56. Get ready, watch it. It’s going to pick up some steam here. If we get a break above 64, draw a big line up here, 5580 that’s what I’m looking for, for this market to slide through that long range bar. Long back here, remember from 5540, out 11 of 12 units.