OK gang, welcome back. What a great end to a great week in total and certainly a nice way to end the week with that little launch off this morning. Let’s started with the basics first. The $VIX is at a new low that we have not seen since the beginning of 2007 and of course that just gets me all warm and fuzzy inside because as a trader, I‘m looking forward to what comes. The last time we saw levels that low, ultimately we can see in the charts what ended up happening. That was the beginning of the end for the bulls. Frankly I don’t care if the market goes up or down because between the futures trading and the options trading, we’re just going to keep humming right along. So, it is very exciting to see where the $VIX is right now. That translates into the Stock Index futures, but before we get to that I want to show you a couple more things that I am going to be looking at.
Let’s look at the Euro, I just want to remind you that I am going to keep watching this. I’m not going to do much with the euro as long as it is between the 1.36-1.37 areas; in fact I’m probably not going to anything to the long side at this point until 1/3750. But, what I am looking to see is if we get back down below the 1.36 are and start pushing toward the 1.35 and below. That is what I would like to see in the Euro in order to get active again. The other thing I am going to be watching outside of the US Stock Index Futures is Gold. Gold briefly got up above yesterday’s high and I want to see if we can do that again going into next week for some short term long futures trading. Otherwise, I’m quite happy to see it break down below this accumulation bar and these double momentum shift bars around the 1240 level and see much lower lows in Gold. I will definitely be keeping an eye on Gold into next week for some futures trading.
Futures Trading In The Stock Indices
As you can imagine, the crown jewel is the US Stock Index Futures. This is great. We have been watching the Russell for weeks and I told you that if we held this area, which is why I said don’t take the shorts yet, don’t make the big bets to the short side yet because we have got to see it get down below or we need to see it get back above. In this case, because of last week’s distribution bar I wanted to see it get back above that. That’s why I have been so aggressive to the long side since that happened. Up to and inclusive of the morning, as Ryan and I were firing off long side trades aggressively because of the great rocket ship that we had at the US open. So, quite exciting futures trading going on.
Peeking Into Next Week’s Trading
As we go into next week, the futures trading strategy for next week is going to be identical to what it was today. We are above the speed lines, so of course, my first reaction would be to think long. But the thing was that I was fully prepared to take shorts back to the speed lines. This morning when buy side trades came in they never looked back. It was buy side and buy side only right off the open today. So, as we go into Monday it is going to be pretty much the same thing. I will consider shorts back down to the speed lines but then I am going to back off of those shorts. Remember the speed lines are going to rise into next week. I will consider short term shorts if we get sell signals back down to those speed lines but I am going to want to get below those speed lines before I will want to take any fresh shorts. But if course, there is lots of room to grow with the rising support underneath. Especially as these get farther and farther away and this market goes parabolic in this ultra-low volatility environment.
I was talking to some of my friends who are doing meet up groups and one of them did a group last night and he was telling me that he had double the expected attendance. I was looking at our Live Trading Room yesterday, we invited a handful of people, a small percentage of our data base, for a special private event, we sort of do that at random and almost everybody showed up, and we weren’t really prepared for that either.
I am really surprised and enlightened and encouraged to see that a lot more traders are actually getting it. This particular summer you don’t want to be away. This is going to be an incredible summer to be a trader, whether you are futures trading or options trading, and we are looking forward to having so many of you on the ride with us.
So, have a great weekend. We talked about some of the key markets, the Stock Index Futures, Euro and Gold that we are going to be focusing on next week. I’m looking forward to a great week with you next week. Take care, enjoy your weekend and let’s get ramped up for another exciting week.