DOW JONES FUTURES WRAP UP
I realize the thread has strayed away from the original idea about Dow Jones Futures, but I just want to finish up the tracking of this trade. You can see we just missed my target here today which was about 9 cents under the low. At this point it is my feeling that the stop should be right where it is indicated, above the high of today. It may well be that this is too close. However, this was a break away type of bar, so if it is quickly taken out, this move down could have been a fake. Once I get a big profit going I tend to track the stops tight and just trap myself out of these types of trades. At times you get a big run, and the price just goes. At other times it just gives a quick burst, then reverses. Since I am not in the business to never be wrong, I tailor my approach to what I am looking to do, and call it a day. If I get taken out here so be it, the profit is still a good one for only being in the trade such a short amount of time.
I could care less about the fundamentals of what the crop reports show. They had nothing to do with why I did this trade, so why should I care what they say now? Just like Eastwood says, "a man has to know his limitations." I know mine.
Here is a fundamental setup that I think is worth pointing out. I know many people like to trade Crude Oil Futures, and this is in the same complex. This is more indicative of the type of thing I will be discussing in one section of my newsletter. I will be covering both short term and longer term ways of trading. Here is a setup to look for a big move from.
This is a situation that is a little unusual, but it goes to show how you need to know how to read the COT report to look for setups. Here we have a key price level being tested in Heating Oil, and at the same time a huge increase in open interest, while at the same time there is a large amount of commercial selling. This basically shows the small money is buying this move into this big resistance level. There are no absolutes I know of, but this is a situation where we have to be on the lookout for sell signals. When you have a big picture fundamental setup like this, it needs to be handled differently than just getting a signal on a daily chart. I will be getting into this in my writings over the next several months. This is why I am not super bullish at the moment on energies. This is a sell setup in my world, not a buy.
I did say that I did not think much would happen here, then a weird story came out today about Wassendorf Jr suing US Bank. Some of the stories indicate the suit accuses a specific person of being involved in the fraud, others just say it is a ploy to try and get out from underneath the $6 Million loan guarantee he has on the HQ building. I think it is most likely the latter, and not to be paid attention to. It would be nice if this had merit, but I doubt it does. If it did and this bank employee did by chance do what he is alleging, you can release the balloons. We all will wind up whole if this by some long shot turns out to be true. If a major bank participated in a fraud like this, the award would be a huge amount, and most likely would be settled. I find it hard to believe this could be true because I think some word along these lines would have leaked out by now. This would take the NFA off the hook if they had actually been told directly by a bank employee, that the revised statement was correct and it was a forgery. It is hard to believe they would not have stated that by now to clear their name, since their very existence is in jeopardy over this. Do not get your hopes up if you read this story, I think it is a ruse.
I thought this next picture was indicative of future students of mine looking up to the instructor for something they want. Perhaps this is how our Futures Trading class will look? This is not me in the picture, but you get the idea I think. We will have beginners and advanced students, come one, come all.