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Market Content October 19, 2009

Today was just one of those typical Monday mornings! A low level of new events occurring throughout the markets and on top of all that, the Chairman of the Federal Reserve, Ben Bernanke, spoke today at 11:00am EST. As history has shown us, the markets tend to be very quite when the Fed Chairman speaks (Identify Market Sentiment For Day Trading Futures). We were only able to take one trade this morning, and it came on the Mini-Russell (Symbol TF). The Mini-Russell didn’t show much price action prior to the opening of the U.S equities market; but once the U.S market opened, sellers entered the market with a strong level of volume, quickly pushing price downward.

The one and only trade of the morning came after the U.S Equities market opened at 9:30am EST. Because Chairman Bernanke was speaking at 11:00am EST, the U.S open at 9:30am EST didn’t show us the usual level of volume it has in the past weeks, and so we made sure we only took perfect set-ups today. At 9:50an EST, after a brief pullback in price action on the Mini-Russell (Symbol TF), we were able to qualify one of our trend continuation set-ups, the Breaker (E-MINI Futures Day Trading Video). With the market looking to turnover once again, we entered the market short at 9:50am EST with a basis of 614.5. Once our stop limit order was executed, we began to watch all of our technical analysis tools to make sure our trade would not result in a loss if it didn’t have to. We quickly realized that the Pace of the Tape indicator (P.O.T) began to turn from green to red, signifying a slowdown in price action. We also noticed that our momentum, via the School of Trade’s proprietary Stochastics indicator, began to curl away from us, signaling that price action might change direction soon. Once we had noticed all of these indications, we decided to exit the trade early at a scratch, +/- 0 Ticks. Even though nothing was gained or lost on our one trade of the morning; today certainly reminded all of our trades to be patient when trading the markets and that preservation of capital always comes first! (Futures Day Trading Account Management Video)