Warrior Trading Blog

Terrific Tuesday Trading +$2,670 | Steve’s Futures Pulse 202


Hey, what’s up fellow traders? Trader Steve here. Happy Tuesday. Well, little after 10:00 Chicago time, and I’m all done trading for the day. When it was all said and done, I had scored 2670. That’s right, another 2K day back to back. That’s awesome. How did I do it? Four separate trades. First, started in the light, sweet crude, scored a breakdown scalp for 2280. Off to the races, a good start day. But guess what? Then I saw an opportunity to initiate the short position in the E-mini S&P and I got stopped-out by literally one tick. Proof that I’m not immune from volatility stop-outs. That trade was a woulda, coulda, shoulda because the market ended up breaking a whole bundle. I mean a whole bundle, like 20 points.

Okay, so at the time, didn’t get the kind of swallowed up in my sorrows about missing a back to back great trade. So I was still up over $1,000 on the trade between those two. Then found a little opportunity, a low risk trade to add $330 to the Canadian dollar, added to the bottom line, perfect. And then as my shirt says, I went gold digging and found a nice pot in the gold market adding 1260. Again, all said and done, 2670 and I’m off to a good start.

Hey it is a full recap which means I’m giving you all the commentary from inside the futures trading chat room. So albeit its a little bit longer, if you’re serious about learning how to trade futures and learning more about my market profile trading method, this is definitely a recap, albeit longer, you won’t want to miss. I look forward to meeting you back at the market soon. Until then, trade well, bye bye.

Hey guys, happy Tuesday. Little early bird special for you guys today, those of you that logged in early. Remember, room opens a 9:00 AM Eastern time. You never know when I may be sitting in front of these charts and I find a little something that I’m eager to share and that was indeed the case here today. I want to get you caught up here on what’s been moving and shaking.

I’m watching a couple of things here on my radar, but let’s first get caught up on the crude oil, which was fantastic because we grabbed little a little bit out of the market here on a scalp trade. I’m going to show you kind of how this one kind of came to life here. 24 by 24 on this one, initiated the short positions at 5404 and then 5407, so we ended up getting a cost average if 5405 covered at 95 and 96, 5395, 5395 on those, so I grab 10 and 9 cents on that one. And relatively short lived in the market. So 2280 to start the day in the crude oil.

And those of you that had been watching the crude oil here now, it’s been kind of popping all over the board, it’s back inside the value area. Let me show you what the crude oil chart looks so you can see what that ended up. We’ve been very quick in the crude, mitigating our exposure time in the crude oil because our scalp trades, again, some of our crew trades have been under two minutes.

So the short position that we ended up taking here, and as you take a look at the chart, I’m bringing it up for you here, focus your attention on the chart on the left. 54, I misspoke, 5403 right here, I said 04. 5403 is where we initiated the short position right here, okay? Then we added to it because the market came up, 5407, we added right here. But the precursor for the add, again before you see the market breaking to the upside, was because we still were down below and pressed up against, but still down below this key demand level that you see over here on the 30 minute timeframe. So see this 30 minute timeframe?

5403 and 5407 which moved our cost average to 5405 are still down below that key 5411 zone at that moment in time in the scalp timeframe, okay? Market did come on down, down, down, down, down, and then you could see it kind of swung a U-turn here on that plywood support. So it’s swung the U-turn right there. So we were very aggressive in our profit taking at 5395 and then 5396 on 12 and 12. So initiated 12, added 12, cover 12, cover 12. Scale in two times, scale out two times. So that’s how we amass 2280 to start today.

Now we’ve got a fresh bill of health here, meaning I’m flat to market. We’ve got a little green to kickoff the day and I’m going to go through my cycles here, my usual suspect markets. Let’s see if we can’t find something else for you here today.

And a friendly reminder, remember, can pay to get logged in nice and early here at 9:00 AM Eastern time as I’m sitting and looking at charts. And if I see something, I call it the early bird special, I’ll alert you to it and you can see those in the the alerts right there in the chat room. All right, let’s talk a little bit about a couple of markets. Let’s look at the E-mini S&P. I’m keeping an eye on what we see here on the edge. Here we go. Let me move this around just a little bit.

First thing we notice here, as you can see, way over bought here. You see that the bulls here have overextended, they’re moving to the upside way up here, over 80% stocks were bullish moments ago in the ESP 500. Look at that change though, we’re already starting to come down and you can see, I know say just, but just 56%, that’s a big difference though. Okay, big difference from 80% down to 53%. So what we’re going to pay attention to is to see if the bears are going to come out of the woodwork here, and that’s that red line there. So the red line represents what percentage of stocks, market cap weighted, are bearish in a five minute time horizon. That’s the scanning timeframe of the market internals here in this product [inaudible 00:05:57]. Look at the… see how it says below?

So 83 stocks, every five seconds this thing refreshes. So this number here is going to change. These numbers will change every five seconds as the market is basically simultaneously looking at those stocks, over 500 stocks of course at S&P 500, and determining whether they’re bullish, a part of the green above line, bearish, the red line, or are they in balance, which would be right in here. And then it basically aggregates all that. We’re not looking at any individual stock here. We’re kind of cutting the onion in half, looking at the layers of the onion to determine whether they are bullish, bearish or neutral.

Now pay attention here in the background. You can see the 10 minute chart, might have a breakdown trade for us here in the evening S&P just like that. So get ready ESU9, that’s still September contract market came up here, retreat off the supply area. I’m going to be paying close attention to see if we get a breakdown below 89 and three-quarters. It’s sitting right here, you can see we’re trading at 91. A little overextended here on that 10 minute time horizon exhausted, that’s that pink magenta color warning here. And then look at those two red dots down here. Those two red dots are little claws, little bear claws that you see coming out of the woods here on the day trade timeframe. Get ready, market could be making that break just like that. In just a moment, we’re going to find out if those bear claws are coming out, 89 and three-quarters.

Another area to be aware of here is on the 30 minute timeframe, 87 and three-quarters. Now remember how we leverage this here. See in this volume congestion up above, that offers up a resistance point, okay? Volume, I want you to associate with resistance. So when it’s above it’s resistance, when it’s below, it’s support and you can see it with market profiles, the only way you can see it. I just entered the short side just moments ago, 89 and a quarter. I’m short the E-mini S&P right now, 89 and a quarter looking for this market to break a bit lower here for us.

Now there’s a couple areas I’m going to pay attention to, okay? Look at this 87 and three-quarters on the 30 minute time frame. If we break down there, we got some room to navigate to 82 but before we get there, you could see this 86 mark’s going to give us a little bit of 86, 85 and a half kind of in there. Remember, trading and level based trading is a bit more of an art form than it is a science, okay, so you’re just visually as a trader, again, using chart trading features is going to be great because of super visual experience.

We’ll look at this market to give us that pull down towards this 86, 85 and a half area. We’re going to see what pace it does that. So far, so good. I’ve got about a half point on the trade so far. We’re not going to be… We’re not expecting this trade to be some home run. Again, this is a little scalp trade. We’re gonna look to minimize our time in the trade. Going to minimize our time in this trade because we’re just looking for this little pocket here. Again, the movement between the breakdown below demand area and a rundown here, it’ll give me a nice buffer of profitability here. Over $2,200 in the crude already, so we’re not gonna put that all at large.

Markets back inside the value area. Look at this POC level over here on the 30, it comes in at 91 and three quarters, and look at that level right there. Seeing this, 92 and a quarter level. Markets back inside the value area, we’re going to see what it does, if it approaches this master point of control right here.