UNLEADED GAS SELL SETUP
Here we have a setup with COT data telling us to be looking to the short side in RB. We had a textbook big short position with Commercials and a corresponding big long position with the Small Specs at the high point. Of course they were also in place well before the top so that information was not much good from a timing stand point. These positions have abated a bit during the initial decline off the highs. There is no doubt this still could be a pullback in the uptrend. Which way we break from here will tell the tale. You can see over on the right I have an alarm on the screen at a price level. I want to be alerted if that price level is broken. It may not be and we could sail back up again.
We have not had aggressive enough buying by the Commercials on the dip yet to indicate a strong buy setup is at hand. As a result I am still looking to favor the down side here. We have had a bit of wild action here the last couple of days so it might be best to consolidate a little bit more before a break out of this area, but it may not happen.
We seem to have independent markets again, with the FED just choosing to control the ES, so that is very exciting for all of us. The risk on risk off trade is gone. It may return if we were to get a big roll over from here, but until that happens I don't think we are going to see it again for a bit.
I want to talk about this market just in general because there is an important point to make.
If you take a close look at this chart how exactly would you make money trading this other than having been a buy and holder? All these little small range low volume days provide no swings for short term trading. You did have a couple of occasional sharp jolts down that would have worked out well had you bought them. However, you also would have been smoked when they happened because you would have been in buy every little dip mode when they came around. Most likely you would have been licking your wounds and thinking a trend change was happening and as a result would not have bought those dips.
This is far and away the world's most manipulated market so why do people become so hell bent on taking this on? I think the main reason is you can day trade it and risk a few hundred bucks at a time while learning. Unfortunately what you learn is just how to lose $250 over and over. If you find a guy who teaches you how to trade this make sure he is taking the trades himself that he is teaching you to take. If he or she is and they have something that works, more power to them. I know there are a lot of people out there who claim they have mastered this but I don't know of any who actually have. Perhaps Don Miller is one who has.
Be careful what you ask for. If you day trade with small stops you are going to wind up with a lot of small losses which is good. The problem is you probably won't wind up with many big wins to offset them. My system is basically treading water in this market this year. It has been attempting since it is a balanced system, to trade both sides of the market and is currently short and upside down a few ticks. Obviously the sell signals that have worked have been very small wins and the buys have been the better ones. I am continuing to monitor the system to see how it does but so far not so good. I do give it a bit of a pass because nothing will make money in a market that is trading like this other than buying it and holding it.
Of course the other possibility is the FED late day save trades. I am sure there is some sweet spot on POMO days time wise but I am not going to take the time to try and find them. If you are hell bent on trading this market, that is research you should be doing.