Wed AM Briefing Preparing For Our Emini Trading Room 08/14/2024
Preparing ES & NQ Traders
For Our Emini and Micros Futures Trading Room
For Our Emini and Micros Futures Trading Room
TRANSCRIPT:
Good morning, everybody! Good morning! Happy CPI Day! Trap the trader all day long—are you going to trade it? Really, I'd think about that. Today's quote: "The plans of the diligent lead to plenty, but those of everyone who is hasty surely lead to poverty." Are you going to have a diligent plan today, or are you going to trade hastily? Be careful today, be careful, be careful. All right, let's get right into it, guys. Let's get right into it. So, welcome to the AM briefing number 239, brought to you by microtrader.com, where together we trade better.
Yesterday, I updated the Essentials Indicator to version 4.8. Up in the upper left-hand corner of your chart, where you see the red arrow pointed, if you click that little down caret, it'll reveal all the indicators you are currently using, and you will see the version numbers there. It makes for easy reference, and you'll see "Essentials Indicator 4.8." In fact, those are the version numbers for each of the indicators that I have, if you want to double-check your versions. So, yeah, minor update yesterday.
Tip of the day: trade the trend. How about we trade when we're loading up, so we go long, and how about trading short when we're loading down? Because trends are hard to break, as we continually see in our trading. News drivers and earnings today—well, CPI. Then tomorrow is the day after CPI, and the day before option expiration, and then Friday is option expiration. Level 10 day from here on out. I encourage you to take Wednesday, Thursday, and Friday off, or just watch the price action for the pure love of price action.
Now it's time for America's favorite game show: Trap the Trader! Now it's time for everyone's favorite categories—check it out: overleveraging, revenge trading, blowing your accounts. I just love resets! And FAFO! And now let's meet today's contestants: Johnny "I just have to trade every day" Johnson, Bob "Happy to be here" Sam, "Never saw a short I didn't short" Stevens, and Malcolm "Make matters worse" Montgomery. Who told you that? And everyone's favorite, back with a fresh set of 10 accounts, Rusty "Reset" Roberts. "Not today, Bob!" And Freddy "FOMO" Frederickson—FOMO! And of course, our returning champion, Patrick "Predict Price" Patterson. "It's going up today, Bob!" Remember, traders, it's all fun and games until the market opens, and until next time, don't become a victim of Trap the Trader.
All right, let's get to the chart here. Yesterday on Zoom, I made this comment, and we're going to just play this real quick: in general, it's better to be looking for longs in the green. So if we can pop this, I might be interested in longing off of that. And the answer to that should be "not might"—100%! 100%! That's what you should do. So let's just take a peek at that real quick.
So this was the range that we had drawn. In fact, let me just remove the sessions real quick so you can see the range where if we pop this, we come back and test it—you want to go long. I also said yesterday that if we typically get into the bottom, we're typically going to explore the top of the range, and boy, we did that yesterday and tried to actually break out and pop above it. In fact, where are we right now in relation to the range? We are still above it. Man, that is so interesting. What a powerful day.
One of the things I told my traders yesterday is that CPI and PPI are more powerful than any level you have on your chart—more powerful than any level you have on your chart. So let's go and just remove the ranges and let's talk about yesterday, which is probably the most beneficial way we could spend our time together right now because of the CPI candle. Who knows? And then the dust has got to settle, so I'm just getting this thing out early, and let's focus on yesterday.
So in the AM briefing, we drew this trend line, and boy did that trend line continue to be followed. I know some people mock trend lines—they do not represent trades, but they certainly represent which side you should be on. If we're on this side of the trend line, you should be going long. If we have a trend line going down, and as long as you're on this side of it, you should be going short. It's a pretty easy way to look at it.
So, the play was long or flat. This is what I said the whole morning—the play is long or flat. You're either long or you're flat, and that proved to be fruitful advice. And then once we got into that range, it definitely was just long or flat. So let's talk about a couple of things here.
So when we popped up, our opening was here yesterday, and we went up a little bit here, and I said, "Okay, if this comes back, I'm taking a long off the opening," because I also knew that was off my range because the opening and the range lined up. Let me turn on my Essentials Indicator here. Turn on the Essentials. I'm going to come into here—let me make a small change to something—yep, this is Essentials Open. Let's make the open a horizontal line so we can see it. So there's the opening, and then let's turn on the ranges real quick, and there's the ranges.
Okay, so the opening was at the edge of my range, and I went, "Okay, I'm going to take this chance here. Why? Because the play is long or flat." The play is long or flat. This is a highly visible location for us, and we had another target sitting right here—I know we did—and I had a magnet sitting right here. You can see it in the live video on my YouTube channel, and my goal was to be long to it because also NQ was barreling towards a gap fill, so everything was sucking the price in this direction. I wanted to be on the train and missed the long right there just by a little bit, and it went straight there, and it's like, "Oh well, ES ate, NQ ate," and then we had this beautiful move here, and I went short.
So I missed the long right there, and then I went short right there, captured four points. I was almost up 10 points; the entry was only worth one contract's worth of risk. That's one of the hardest things to manage—one contract. And if I had had multiple contracts, I would have done very well just because you could keep one back, and eventually, you got all the way to the bottom of the range here, and this would have been the most perfect location to get out.
So we had this strong candle coming in here. One of my traders, Scott, was long here, and I just thought he was going to be in the trade of the day. I was so excited for him, and then you got this monster vomit candle coming back in, and I went, "You know what? I'm not taking this trade, guys." And usually, that's the best trade for you to take. It's unbelievable how many times I will talk myself out of an entry when there's every reason in the world, and honestly, I beat myself up the entire day yesterday over this trade. Why should I take this trade? Well, the play is long or flat. We are still inside of this trend line. We've got the opening, bottom of range, and VWAP, okay? Now, the only reason I talked myself out of it was twofold: number one, this eight-point candle, or 13-point candle, whatever that was, you go, "Dang," and we were loading down after hitting a major goal. Okay, is this all ES wanted to do? And then we slam it back through and come down and get the overnight lows—very possible.
However, one of the things I tell my traders: if you're going to take a trade and you're not 100% sure, but you have all these factors—this is playing chess; this is knowing where you're at on the chessboard—you can always put a single contract, like I did here, and put yourself a several-point loss there. It's not the end of the world. Even a 10-point loss—that's not going to ruin your day. And I missed the most beautiful touch-and-go, easy 50-pointer on the chart. So I will not make that mistake again. When the bulls are in control and you have every one of these factors in your favor, you take the trade. You take the trade.
For those who aren't in our group, that "all above" simply means that every one of the indices here were above yesterday's high. This is a warning: don't counter this. Don't counter this. Don't counter this. Let me turn on my strong levels, because that played a role here too. And for those in my group, what I'm about to talk about next is really important as well.
So, top of the range is up here at this strong range. Okay, so I'm going to turn off the ranges here because it played its role for us, but just know that up there is the top of the range. In fact, let's come in here—I'm going to draw this line—there's the top of the range, okay? That's a high-timeframe range where I have determined the price loves to bounce back and forth through. So, as price is barreling up here, okay, as price is moving up and we're marching up, we've now almost gone parabolic, right? So we have this main trend line, and at some point, you could say, "Geez, we went parabolic," and you kind of adapted out until it eventually matched this one, but we're in some bit of a parabolic move.
Now, we had this strong line here, and price touched it and bounced, went over the top, touched, and bounced. If you were long from the bottom, I believe this would have been the most perfect add. Why? Because price typically goes to the top end of the range, okay? And this was a strong level—it had its reaction, it value-gapped through it, and when it comes back, that's an add or that's a long if you're trading. I was already done trading, so I didn't take that trade, but you very well could have done that trade because it would have been a good add-on.
So let's go back to a three-minute chart here for a second. So we discussed my trader mistake here: when you are in a great trade location, and it fell within what was yesterday's tip of the day—be greedy—where's the greediest spot on this chart I could have traded? Based off RT, what about the opening low there? Yeah, that would have been the greediest spot. So here I'm remarking to them, "Hey guys, careful, trends are hard to break. Trends are hard to break." So, basically, I'm telling you, don't go short. Don't short this. You don't need to short this.
Now, I told the group in the AM, "If we get up here to the top of this range, I am interested in a put play," and I actually put on two put plays here yesterday. One at this point when we hit the top of the range, and actually right there at the end of the day where it did that push through just after the market closed, I was able to put on a put play right there. And it's more of a volatility play than a delta play. So we will see what the CPI candle brings today, and they're kind of lotto plays. Now, I have a position on for today and actually for the next two weeks, so it kind of helps satisfy the need to trade with it.
So let's scroll out. What have we done? Well, it's the day before CPI, we're doing nothing. Let's scrunch this up—you’re going nowhere, but we are in the top of the distribution. I can delete that now, I can delete that now. We are in the top of the distribution. So let's go to a 4-hour chart. Let me remove my strongs, let me remove this, let's pull this in. And what I want to do... so, high-timeframe trend line here—we're almost at it. Now let me do this: let me switch this to NQ because this same trend line on NQ looks different.
We hit it, right? We hit it. Depending on how you want to draw it, we hit it. So NQ is actually at this exact location on a high-timeframe chart as ES, and I posted those on the trading floor last night for you to look at. So let's zoom in here, and where is that number, actually? So let's say we were to open up—let's go to a 30-minute chart here. We're still a little bit away from the candle. Let's come over here though to 7:30. If it moves straight up and hits this line, this is basically 5489. If this thing decides to shoot straight up, let's look at another thing—another chart I posted in the group last night. I should have just shared the chart.
So a higher-timeframe trend line here as well, and then we had this trend line that we had on our chart as well from the weekend candles video. And then what did we do? We went super parabolic there. So look at this on a higher timeframe here. In fact, if a person wanted to, you could come in here with this orange and draw this in, which is really a great idea, actually. And I'm going to remove this at this time—that's the adjustment I'm going to make. So on this higher timeframe, mainline parabolic move, and then stupid parabolic move. Should we be shorting this? Only if you like pain. If you like pain, that might be a good choice.
And now we're really close to this high-timeframe trend line. We break up over this—the short game is 100% over. 100% over. So I could... you know, I made small put plays—I don't put very much into those—but also we could get a CPI candle that makes this revert back to here. So let's look at that as well. Where would that be? Let's come in here to the 7:30. So if we push that down to here, we're about 5417. And if this pushes down to here, which would be down here at these lows, which would be really nice, 5340 on that as well. So those would be the numbers I would be looking for on the CPI candle, but once again, it is level 10—trade at your own risk.
All right, so now let's look at the bull-bear. I don't even know if it matters today because of the situation we're in with the CPI candle, but let's zoom in a little bit here. I'm going to move these trend lines back down here real quick, and then this folder—let's turn this off. So if we had to draw a trend line in the overnight session, I think it's pretty clear—it's just flat, but it's certainly not down. And if you had to draw something, well, it'd have to be up, right? It'd have to be up. So we got to give that in favor of the bulls. Session stacking—bulls. VWAP—I don't even know... like literally, I don't even know if that matters today at this point because we're just waiting on bated breath. But VWAP would have to go to bulls. Overnight half-back—we're above that. Yesterday's range—we are certainly in the upper distribution. Indices—let's go take a peek at the indices real quick. We are all in the upper distribution. Russell is breaking out, so certainly this is in favor of the bulls. Bull-bear line—I would lean more on the higher-timeframe trend lines at this point. If I had to do a bull-bear line, it would be off the low of this candle right here. That’s at 5433.25. 5433.25. I’ve got to give that to the bulls.
We're new week opening gaps—we're way above them. The other way to look at that is to say, well, which way would we be attracted to go if we're going to go back to the new week opening gap, and then all of that. So let's come over here—Monday, Sunday—down here. So the gap is down here, so if you had to say, where would price be attracted to go based off new week opening gap and new day opening gaps? In all honesty, it's in favor of the bears, but overall it's the bulls to lose. It's the bulls to lose. I wish you good luck trading today, and I will see my traders live for the CPI candle here in an hour and a half. Stay green, my friends, and to learn more about our group, go to microstrader.com.
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