Well — the Spoos were able to rally out into the end of the day — and to end the week. If you missed the end of the trading session — you missed the final leg up and HOD for the session in the Spoos (ES). The title gives away todays “trading blog”… I trade the S&P 500 — and when I trade the minis, I prefer to use weeklies to manage my RISK. Keyword being – RISK.

The Spoos are one of the most widely traded futures in the universe — that being said, this is why they “move” they way that they do, many eyes and participants around the world trading the same thing… While most people were focused on the December contract for the ES (as roll is approaching here), I was still focused on the September contract. — This is because I was trading the Spoos through the ESU5 (wk2) weekly options. With the ability to trade the weeklies (every 7 days lol), it creates an unbelievable amount of leverage and volatility for the ES, especially come expiration time (as we saw today, and every Friday).

Most investors look at the market so simply; “it has to go up because that data was good” or “there is insider buying, stock will go up”, — those two hypothetical outlooks are not very far fetched — but as “simple” as it all sounds, the market is not that simple. *This brings me to my point of todays post, — MARKETS DO THINGS FOR REASONS MOST INVESTORS/TRADERS AREN’T EVEN THINKING OF…

What does this mean you may be wondering?

Basically– this means that although we are always looking for the “obvious or simple” explanations as to why the market DOES or SHOULD do something — the true catalyst is usually a COMPLETELY different reason. So, the same concept mentioned that we had weekly ES options expiring today at 3pm… THIS is the reason we had our final leg up into the close and through the 3:15 close for ES. It’s easy for the markets to move when traders can leverage up and define their risk (EVERY WEEK!)… So basically, we have an opportunity to move BIG, and QUICKLY as we approach the end of every single trading week (assuming there are options expiring because most products I trade have weeklies). So although AAPL was bid basically since the open, and really started picking up steam into the end of the session, I wanted to say “this was the reason that the ES ended up rallying (and it’s the obvious part of it) — but it was really the ability for traders to manage their risk (so efficiently and not costly) that gave us the ability to Move the way we so often do, especially into option expiration Fridays.

So by using the weeklies — I was not only able to scalp ES to the upside (but I could do it with defined risk, and for free based on the put spread I sold to pay for my put protection as I was long ES future/option. Just like any “trade”, the more I focus on the weeklies, the more I learn about them, and the better I manage my risk as I speculate in the S&P 500 every week.

Besides the positions I consistently manage in Gold GC and Crude Oil CL — The ES is my third most traded product, and it is quickly moving up my preferred list (because of the ability to trade weeklies).

So I choose to focus less on the “analyst noise and old trader tales”, and I study more and more – into the mechanics and boring stuff that REALLY makes markets move!

Let’s try again next week. Have a GREAT weekend! – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

Continuing on the conversation from yesterday’s post — The key is to ensure that you can set-up your risk in order to stay in your trade (long enough to validate your conviction)… That being said, if you are a retail trader (and most of us are), being long, long anything — You were tested today.

What a great rally in the ES, this morning, we traded as high as 1992 on the Spoos… at that point, I had to take some of the “long stockmarket” trade off of the table– so I did. — Then a few hours later, the trader that I am — had to get long again as we were below 1970 — now we are lower, and I’m back in it. That being said– I am in it, the trade is still on, its live, its unrealized, I had my earlier trade, now I have a new basically long delta position in ES.

While the ES continues to be a “falling knife” on a day like today for example, I fortunately have been able to protect my “shots at being long stocks” by paying up an owning protection. Basically I am paying to play — sure I can lose the premium, and it can take away from my profits, but I pay for the PUTS because it keeps me in the game. Being long ES for example, you could easily “blowout” even on small size, when we have 50pt intraday swings (on the regular). So for me — I can either pay to play, and pay up for the PUTS, or I won’t be playing at all. Trying to scalp the ES with a tight stop right now is not going to be my approach, I am swing trading between a usually bullish stance on the stock market. (Which has been the greatest creation of wealth as I look around at the oldest bulls I know)… These days, with technology and now all these new forms of leverage, – things move faster than ever – I think its better to be safe than sorry, and define your risk before EVERY trade.

Lastly, I don’t often talk about individual stocks, but I am eying the big elephants in the room in AAPL and TWTR. (Especially while I try and corner the ES)… When I look at these two very different and unique companies (in addition to similar blue chip names) I see a lot more upside than downside, — it may not be clean/pretty — but if those stocks have more upside, I would think the Spoos (ES) has the potential for higher trading again. The other spot I am looking at to get an idea “IF” the ES can rally back is commodities (Gold GC and OIL CL) — Everyone keeps talking about the global focus, especially Asia’s influence, if this is the case, I will be looking at the commodities for the next “buy signal”, until then I will be paying to play – waiting for the rally and staying in the game. You will always be thankful for having protection — without it, I don’t see it as “realistic” to live to trade another day. Ha… how else do you expect to catch a possible turnaround in (Gold GC and Oil CL)…

*Either you could have made more, or you’ll be thankful that it saved you, it’s a good problem to have. Just need to get past the “paying to play” concept.

In this case, in some of these particular set-ups I mentioned, I am thankful that it saved me, and ideally giving me the opportunity to, maybe if I’m lucky — I’ll be complaining I could have made more soon!

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

Too often people out trade / over trade themselves — and usually into losses… It’s not the market that beats them, its themselves! I have learned that myself in the past, but I am borrowing knowledge from Jesse Livermore as he is quoted in his unofficial biography Reminiscence of a Stock Operator.

“The reason is that a man may see straight and clearly and yet become impatient or doubtful when the market takes its time about doing as he figured it must do. That is why so many men in Wall Street, who are not at all in the sucker class, not even in the third grade, nevertheless lose money. The market does not beat them. They beat themselves, because though they have brains they cannot sit tight. Old Turkey was dead right in doing and saying what he did. He had not only the courage of his convictions but the intelligent patience to sit tight.”

PATIENCE. DISCIPLINE. THE ABILITY TO BE COMFORTABLE WITH DOING NOTHING, AND USUALLY WAITING FOR “IT” TO PLAY OUT. — I am reading this newer version of Reminiscence of a Stock Operator, and I can’t help but relate almost every famous quote, or even the random stories, to some of my own. Clearly I am not swinging nor experiencing the identical moments described in the book, but I have my own versions throughout my own career thus far. *Anyways, the point of this quote is to “Stay in the game, — to live to trade another day, and to catch (profit from) your convictions”, which I talk about so often here.

We are trading Futures, the name is giving it away, focus on the future. While we manage risk in the present time, and it matters right now — the game is designed looking forward, where will we (and your risk) be in 5 min, 10 min, a day or so? It is less about being right “immediately” and more about figuring out “how can I manage this position based on my bias for that particular product”. — I wanted the stock market to rally last week, I thought we would bottom, and I could leverage up the position into the end of that week, but the market doesn’t care about me, so it was my job to figure out, “how do I stay in?” Since this is the way I set myself up, I would have loved it Friday, but I will not complain about getting the second best day of the year for stocks a session late. I am still in.. *So today I was long ES, and I knew my risk as I had owned the outright future ES, and front month 1895 put, (which I rolled up to 1925 strike), basically long synthetic calls (long deltas in ES). — I wanted to buy when we were low, which I did, and I can manage my risk accordingly throughout the entire trade, that being said, this is risk capital, and if I am wrong, I am willing to lose what I can there based on the strikes and outrights.

More importantly, I didn’t miss the move in Copper today. This is the move I have been waiting for. The Doctor (Dr. Copper) was finally resilient to the upside — we had the best day of the year for HG and we are still at “low levels” for recent time. IMO – being able to lean on the strength in copper, made it “easier” for me to trade Crude, ES, Gold, and risk/commodity currencies like CAD/AUD/NZD.

The key is, to not bust yourSELF out of the trade, stay in the game! Live to trade another day, — this is only possible if you learn from your mistakes and continue to sharpen your skills, always, constantly. The future markets are more Darwinian than they have been in a long time again, volatility is creeping back in, we have extreme rate rumors, and even the best traders/hedgers/banks in the world are “re-tooling” their approaches in the Futures Market. Make sure to continue to adapt with it, and keep yourself in the trades you BELIEVE IN. This way, when the bottom or top, or continuation you have been waiting for begins to blast off, — you aren’t stuck chasing alpha (and reporting old news/prices) with all the other Monday morning Quarterbacks, or in this case Tuesday Morning QB’s.

Manage your risk, and wait – let the market WORK for you.

Still waiting in Crude / Gold. In the meantime, I am sitting back and letting the MARKET work for ME.

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

Spent a lot of time at the end of the session, doing some data mining, as well as : some good old fashioned charting and applicable middle school math. — Good trades or bad trades, I am always relieved when the market finally stops moving, and for futures, this doesn’t happen until 4:15pm ct.

Today, we had another “flush” in the market, this time, it started last night, continued this morning, but didn’t really accelerate until after a quick headfake around Fed talk (Jeffrey Lacker) before the awaited Employment Situation to help “shake” things up.

The markets seem more confused than ever, as bulls can rip the ES up 30 pts in an hour or so at anytime, yet the bears have taken over the charts for the moment. I guess confusion =’s volatility, and that is a good thing for traders. If the Spoooos ES are moving, — the market is moving. So as we sold off almost 33-34 pts from the lowest point I can remember buying (or tweeting) — I looked around to see where did this spill into?

The RED ticker tapes, as we are getting more and more used to, took over the boards again. What started as a very “green” morning in a lot of products for me, ended up turning into another RED shake out. I say shake out, because this is futures, and as most of these products did not expire today and continue to trade towards their deliverable date — the market can still make it’s move.

I sat in Gold GC, (as I complain and will continue to complain regarding the yellow metal being a forgotten investment) — It still did hold / protect my money relatively – as the algos went out to offer EVERYTHING. Well, almost everything. (It wasn’t quite panic, it seemed quite orderly, but it was orderly selling) — as a general bull, I have a tendency to scalp or swing to the upside in positions, this is no place for me. *But with options and futures, I am able to protect and manage my risk, *as well as I can of course.

Overall, I think we had a classic little holiday shake out today — people are getting ready for the 3 day holiday weekend, as they shout “whoop whoop” at 3:33 on the trading floor of the NYSE. ***THIS WILL ALL BE OLD NEWS AND FORGOTTEN THE MOMENT WE START TRADING NEXT WEEK. — So might as well look to the future, in the futures— As far as the CME goes, these future products will be open Sunday and trade a half session, that will be trade date through Monday as well. I’ll be sitting in Gold, and a more than a few other commodities and markets that I consistently have been trading positions around. Most would anticipate since its Labor Day holiday trading schedule, maybe, “we won’t move”… But Crude Oil had it’s largest move over that sketchy stretched Thanksgiving holiday trading schedule last year — I wouldn’t be surprised to see some serious swings, so make sure you are there to manage your risk!

Most importantly, enjoy the weekend, the market will be back, it’s not going anywhere, saturday is the only day to truly “take a break”, so MAKE SURE you do so. — I am not a registered investment advisor, so I won’t tell you when or what to buy and sell, but I will tell you that taking a real break is the most important thing you can do for yourself. ***Because once the market opens back up Sunday — it will NOT take a break for you. The market is WON after-hours, not only in the fact that I am sitting here and working extra hours after the closing bell has already rang — but in the fact that I feel just as passionate about taking that break tomorrow.

Let’s try again next week. Have a GREAT weekend! – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

So… if you shorted Gold GC today, please stop reading this, you’re not welcome here! Ha… But seriously…

As Crude Oil continues to work for me, and even if it is scary / not pretty, CL finding its way into the green again. YET — My focus is on the metals, and specifically in GC. I have been stalking Gold for a long time, I watch all these different markets, and I often try and figure out their implications on the shiny forgotten metal. Over the years, I have traded it with/against the stocks, the dollar, oil… I still finally realize, nobody cares about Gold GC — with the exception of maybe the late night wingnut gold bug crowd buying up siver eagle coins or whatever they are called LOL… *My issue is I want the hedge fund manager, banker, or say trader to start caring for the forgotten safe haven. Without volume, without a crowd, without opinions, — Gold GC isn’t going to be able to move.

Is that it—, or is there a certain central bank that has this thing on complete auto-rig, so they can move it when they need? *Or, is there an investment bank, thats cornering everybody, –especially the guys buying the coins.

Either way, I don’t think we stay here, and it’s not like we are on the lowest levels of the year for GC, even as we have had the USD attempting to firm up again. One thing that is continuing to confuse me on the Gold GC move, or lack there of… If the stocks are going to sell off for fear/uncertainty reasons — Why not BUY GOLD? (I am baffled that people would rather buy US Treasuries ahead of a rate rise, or even a fake product in the intangible untamable VIX).

BASICALLY — AS MY GENERATION HAS KILLED THE VALUE IN ANYTHING PHYSICAL OR TANGIBLE. — WE DON’T SEE THE “SAFENESS” IN BEING ABLE TO HOLD/OWN THE PHYSICAL GOLD, (vs. buying virtual protection in a electronic contract).

Future markets are extremely Darwinian, and with weeklies/EOMs/quarterlys, different sizes of contracts, settlements, exchanges, brokers, more and more changing technology than ever today — heck we just finally closed the PHYSICAL futures pits. — We don’t trade pork bellies or potatoes anymore, but I am not willing to have the argument debating Golds relevance, as if Gold is about to go off the CME trading board, ha..

One thing that’s in Gold’s camp, is that to it’s peers, like a Platinum, Gold is the best in class, it trades at a premium to Platinum for example, which for a long time, GC traded Platinum 1006.1). So relatively, maybe Gold doesn’t seem like the “worst product in the world”. I mean as my last 2 blog posts supported, and I still stand by it, “I am hiding out in Gold GC”. *Even if the old safe haven is not heading north (for now), it was still “safer” to hide in while almost every Market was in the Red during these past couple of “CRAZY Sessions”.

For now, I have more than a few positions I am managing — and as I always trade futures looking towards tomorrows session, I anticipate that we will find out which came first: the goose or the golden egg. *Basically, relationships and correlations come and go, but they will be back as Gold GC tries to figure out, if it is truly “The Forgotten Investment”.

One last thing going for Gold is: everyone is being pretty quiet about the low price again — it would alarm me more, if all of a sudden, everyone was talking about Gold GC. I think people will talk about it again, BUT hopefully, once it is to late (as everyone is comfortable being a monday morning QB for some reason). But then again — I know nothing.

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

Often times people end up either losing their minds, or their money, before a market finally turns their way. — from trial and error, I have learned and for now figured out, how to avoid both of those extremes.

*That being said, I continue to learn more about the market each and every time I trade, even when I am losing, or winning, I get humbled, and I learn.

When I first started trading, although I was more focused on individual equities and then later on stock options. — for the last 5+ years, I have been focused on futures markets both professionally and on a retail level, this is where I choose to manage my risk.

If you have been reading my blogs, you know- maybe my style or perspective on certain market issues and trades. As I continue to let the Crude Oil trade marinate, I look to turkey day to benchmark some significant upside in CL. *Trading futures, (although conscious of the days PnL and margins) — I am almost always thinking about tomorrow, next week, next month! Futures go out for months, quarters, and years for a reason, to manage risk, with the ability to speculate in all kinds of durations.

This morning as the stocks sold off, (ES for me), I was frustrated for the “lack of bid” in the safe haven Gold GC… I am in the Gold bug camp that feels; considering all things right now, a lot of these set ups give me no place to “hide” but in the old Yellow Metal. That being said, the reason Gold must have never bid, was that there was no real fear today, as the stock bulls came out at the close to bring the ES up 30 handles. Yesterday, I blogged about “Where do you hide?” when EVERY market is in the red, to me, even tho Gold hadn’t rallied, while OIL was dropping 3% (before a epic recovery to the green and new intraday HOD), and stocks were coming off this morning, I could hide in Gold GC as it barely dropped — but it never came back and there was missed opportunity had I just sat in Gold and waited. Gold will matter when it does, for now can’t force it to move, just need to play defense.

While most were panicking in the short term on CL (I had friends calling me regarding their USO or OIL positions, or energy stocks)– , I was positioning myself for a hopeful comeback, I wish I covered more puts on the lows or did some different things, I always feel like that, but, luckily, Crude came back into the green despite all the price pessimism, and I stayed long deltas, as I will continue to do so.

As I constantly go back to questions like: “Who came first?, who leads?, who follows?”.. as I riffle through not only charts, but all the tweets and headlines and data. — it constantly changes, and all we can do to survive in the futures business is think — where is it going? So that’s how my brain constantly thinks, and then once I try and figure out where I think something is going, I try to figure out — Well, how can I get long (or short) for the best risk/reward or “best way to put position on”.

Lastly, I learned a lesson the hard way today — READ YOUR TICKETS, don’t be in a rush to put in a trade, be wiling to miss a trade to ensure it is correct. — I can’t remember the last time when I rushed to put a trade on, and I really couldn’t have waited one more second (although it happens lol), better to be safe than sorry (or broke). Anyways– I am long ES, and I go to buy some protection in Wk 2 options, and instead of buying 1 lot of a certain put, I must have had a 10 lot loaded up — I noticed within 1min and 30seconds, and even that was enough to teach me a $400 lesson in less than 2 min) by the time I noticed and went to cover 9 of accidental 10 purchased. Again, this was a hedge, and luckily I caught a great rally by defending my position in ES today (finally), but I learn a lesson and pay taxes to the market makers for my errors/mistakes. Lesson: Attention to detail is everything, although… now I want to make that $ back :). *READ YOUR TICKETS!

Realistically, as my approach in Futures is pretty consistent swing/position trading, or at least every trade is pretty much held for longer than one session (besides managing risk intraday), there is no reason to “rush” and have fat finger errors, my horizon is much longer than the next 10 seconds… but in futures, as you will experience… those 10 seconds, DO MATTER! Good luck all!

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

What do you do on these days? Where can you hide? — Seriously, I’m asking for a friend ha… but, as most of us here are retail clients – (generally buying more than selling), — what do you do on these days?

As the Major indices drop about -3% across the board in one session — One begins to wonder if 500 pt Dow and 60 pt ES days are the new “normal”… One thing is for certain, look at any chart and you can see that volatility is back… or coming back. Look at the VIX (Or the TRIN today!) — The chart has more than doubled off the lows in the past few sessions. As the title of the blog and the opening paragraph allude to — I am seeking the answer to the almighty question: What do you do when there is blood on the streets and there is no bid — anywhere.

Except — “kind of” a fake or small bid in Gold… but maybe the CBs are just trying to scalp day traders intraday.

One thing that did make sense, and I mentioned it at the end of yesterdays blog “(I still think Gold GC is the next “market” to make a significant move (or maybe I am positioned for that).” — I was and still am awaiting Gold GC’s next rally, it has been a long time since the yellow safe haven could sustain a squeeze higher… But if stocks are crashing and the USD has paused for the moment (as fed snoozes and becomes more cautious) — where else do I want to put my money? So I guess the answer to “Where do you hide? — Only you know the answer. But as far as myself — I am hiding in Gold and similar precious metals, (as well as other oversold commodities or fx). But as you see on a day like today, Stocks down, Copper down, Coffee down, Soybeans down, Dollar down, Crude down, for the most part — It didn’t really matter what the ticker was, over 90% of the SP500 was in the red it seemed. …When there is blood on the streets, and you can smell/see the fear, its unfortunate because usually (we can get caught up in it) — but as we are here to trade futures, take a second and think about where we were last week, or even this Sunday (in whatever market it is that you trade) — and think about: Where is it going to be tomorrow, and can I “hide” in it while extremely volatile price discovery is rippling into every/any market, regardless of correlation, or reason. (I am less focused now on trying to “day trade – time the market”, and more focused on how to best manage risk around my oppinions of future movement – for tomorrow). Basically, as I gain a little bit more of a LT perspective or approach, I can avoid the noise “blowing me out” or forcing trades when I want them in the moment, – best to hide out in a “safer” place like IMO GC here, until I feel comfortable jumping big elsewhere. (If I only had GC on tho, ha…)

The goal in futures is to make money, and most importantly this is done by “Living to trade another day”, these are incredibly wild times in the futures market (and as mentioned other markets), the goal is to stay in the game, sometimes you will have to play defense and defend your positions, it won’t always be a bull party. BUT — The best traders can stick around for when the party returns.

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

It isn’t often that I don’t see the “Sunday Futures Open”, but I was busy yesterday, and had dinner, and I couldn’t check them until a few hours in. But I checked them at dinner, of course, on the phone. — That being said, once I checked them, I was pretty aggressive to take advantage of thin overnight trade (that I didn’t or couldn’t agree with).

First off, I was pleased to see the USD sell off over the weekend — I know we “will” raise rates, but from last weeks price action and headlines — It didn’t seem like we would be making any move at all come September. *As of today’s settlement, we are now in September, the august month end portfolio “adjustments” have taken place, and it is a fresh start. – I was able to make a few good trades betting on some risk currencies, and still have a lot of opportunity to trade the EUR/USD, I think this is a must trade again as the consistent up and down opportunity is there.

This morning I was incredibly swamped, I legitimately did not get to “trade” or look at an actual computer until 1pm. I was doing a lot of “phone” monitoring and (trading if needed). Sometimes it pays to be busy — I mean if you have been reading my blogs, you know I have been bullish on commodities, but specifically in my Crude Oil position… This has ultimately rallied almost 30% since Wednesday night of last week. As always, I was focused on the future, as in “where we are going next”, and this trade is working out, much more than anticipated. Granted, we had come off extremely aggressively from our 100+ a barrel highs, but clearly I’m not the only one who sees the bigger picture now. As I noted before this “rally” stemmed from the huge bid in distillates (RBOB HO), the products have had incredible strength and follow through.

Last night Crude Oil was down well over $1 all night, “as many as you wanted”, this was the perfect opportunity for me to not only cover the calls I sold at eod Friday, but cover some puts as well… Then I went to sleep. Everyone else was puking/selling, I saw it as the “shake and bake” set up to hopefully our third BIG rally/squeeze. This morning, CL was a bit lower still, it had traded above 45, but came back down around U.S. market open… Then like Thursday, like Friday, *The trend is your friend — and we are up almost another $4 today alone! Luckily, I was busy for almost the entire session, I wasn’t able to “ruin or mess this trade up”, I constantly adjust the risk in this position, but again during the US NYMEX session, Crude did all the work. — Since I have positioned for the “future”, I didn’t need to play Monday Morning QB, — The best thing about the entire CL position, is I have paid ALOT on hedges and kept risk tight with rolling up puts and as I said earlier selling calls at time against long futures, as well as rolling between months and outrights/options.

The only way to be a profitable trader — is to trade — I have to take risk, or I can’t make (or lose) any money. I am focused more now than ever, on making money, if I stay active and TRADE, this is very possible, and then sometimes, you get a little lucky, and even without trading, you make more $. — “Sometimes the best trade, is no trade at all”.

I’m sick of talking about Crude Oil to be honest, (as I am sure most people are, since they were all short clearly ha)… I love the trade, and I think there is a lot more to do around it, but I am still cautiously optimistic. (And as I have this cautious optimism, I can’t remember the last time we rallied like this, let alone 3 days in a row.

I was distracted with ES EOM options expiration today (once I could trade), and I still think Gold GC is the next “market” to make a significant move (or maybe I am positioned for that).

That being said, it may sound like I know something, but, I know nothing. — And: Knowing that I know nothing has given me back the ability to trade. For now.

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

Well– I can’t say enough about the unbelievable performance and “justice” in the price of Crude Oil these past few days… I honestly can’t understand how we really fell this low in price (again), but at least during these last two sessions; the oil bulls have come out to rally. Front month Crude Oil (CL) again (2nd day in a row) was the largest gainer of any futures market tradable on earth. Thus if you are a bull, and you are trading these markets, the last two sessions, there wasn’t a better product than looking within the energy space — and looking directly at CL was the only choice at this point, or at least for me.

OCT 15 Crude Oil opened @ 42.68, traded as low as 41.78, as high as 45.90, ultimately to settle at 45.22 +2.66 a barrel today! The NOV-Dec-Jan were all “just as bid” as clearly players wanted to get long Crude Oil as we had one of the largest short squeezes back to back in Crude Oil in a very very long time (Well over 12% gains for the week). This momentum and strength could be seen spilling over from the perma-bid in the distillates (RBOB HO) the products have had a “real bid” as Q3 is coming to an end. All of a sudden – the bears have gotten very quiet (literally where have they been?), but now we start to have bulls coming out again, and I remember this earlier in the year when we fell to low 40s in March, only to be trading above 60 by April. **All the bulls came out once or as we started getting back towards the 2015 highs… I am cautiously optimistic going forward, as I clearly think we could/should trade higher than where we are and have been, I respect markets and risk, thus I can’t sit naked and pray… I will stay long (if I want), but I will do so through calls or with protection in puts or selling calls against long futures (basically synthetic long calls) at that point. *Basically as long as “you know your risk”, I think there is no better place to be taking attempts at scalping and speculating than the futures market. Again, I don’t give investment advice, all I can do is share with you my journal/notes regarding some of my trades or what’s on my mind market wise.

The last part of the post I want to touch on expiration, I like to play weeklies, I like to play end of months, different expirations don’t scare me, but it is important to know all the rules or steps one would take in any scenario, (as you trade into or though an expiration). As I was feeling rather euphoric/confident regarding my recent Crude trade, and the general direction of my recent “risk”… I figured I should take some shots at getting long the stocks again, as I had puked the ES last Friday and been focused elsewhere— I thought maybe this Friday we rally to close. *Well by the end of the day, I had gotten my rally, I mean literally into the final minutes of trade, the ES went from below 1972 at 14:42, to above 1990 by 15:13! This really is not that big of a move (for this week), but I was certainly not expecting to see my last shot ES options play turn into anything but zero with minutes left. But I lost on the trade overall, I cut my chances of losses, and attention to detail helped me scrap nickles and dimes as more of my weeklies became ITM… But- overall, the problem was not only that these options were expiring at 3pm today, but I did not have quite the backup plan or vision for this brief smug ES trade, nor the set-up, patience, etc. I mean sure stocks could rally into close (and they did!), but we had already came up huge off of Monday’s debacle and so on… this was a bit aggresive. Ultimately I got pinned on some of my calls to (the 1985s), which ended up working out (as in not going to zero) since we had that pop — but you should have seen me panicking when I realized we were .25 or .50 ITM on 1985 and I wanted to know if I was long ES or not, as we popped to 1990 and I got “lucky” learning a lesson and not losing to much $. Overall – the last part of the post is to point out – “Sometimes the best trade, is no trade at all”. Basically don’t overtrade, it’s lucky enough to catch good moves this week and “live to trade another day”.

A Epic, record, volatile week for the books. I can barely remember the beginning of the week to be honest, what a long couple days, I can’t imagine any trader (win or lose) who isn’t finally relieved and relaxing this weekend… That is… Until Sunday at the Futures open again!

Let’s try again next week. Have a GREAT weekend! – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote

I know… it may only be a one day event. So that being said— why not talk about it for a moment, since the futures are still not even closed, and hit a new high since 1:30 settlement.

Yesterday I posted dumbfounded regarding “Why isn’t CL rallying?” –

@toddgordontrade @KeeneOnMarket Trying to figure out! What will move Crude Oil… (*Not the Dow) – Draw on CL Supply? http://t.co/LOdFnRPW6l

— Bret Rosenthal (@TheMarketQuote) August 26, 2015

Well—- I guess the answer is, because “although maybe it should have, it seemed best to squeeze out the last weak shoestring longs in the market maker eyes rather than just give all the retail day traders the low hanging fruit! *Well— if you were patient enough, managed your risk, weathered the storm, maybe even got lucky, YOU may have caught the BEST DAY IN OIL SINCE MARCH 2009.

Front month Crude Oil settled @ $42.56 a barrel +$3.96 or +10.3%! There was not a better performing market to be in when it comes to any future product today. —So that being said, Crude Oil just had its best day in the last 3 years. And, anyone who has been following markets or specifically trading Energy this past year and a half can tell you; This has been the worst streak for Oil in over 30 years, last year alone was a record breaking move!

As I mentioned twice as I wrapped up yesterdays Blog post “WHY WOULDN’T CRUDE OIL CL BE ABLE TO EVEN END IN THE GREEN, LET ALONE UNCH?”. – I guess the answer was, it was setting up for today.

After the crude oil stocks unexpectedly fell by more than 5 million barrels last week, data showing inventories in Cushing, OK, declining.. And specifically the API and EIA we had yesterday (which we shake and baked off of capitulation lows)… All of a sudden it seems like the “numbers don’t lie, people do” saying is kicking into traders minds when it comes to “how they are going to TRADE Crude Oil going forward.” People kept talking about supply, but I think this for a moment, at least, in the last 24 hours, the bearish sentiment is certainly being tested by the historically strong and aggressive oil bulls moving prices in a record fashion. It helps that: *(the thought of diminished crude supplies mixed with stocks bid back up, copper recovering, I saw coal stocks up stupid amounts, even the aud/cad/nzd were higher today with a stronger USD).

Just as many retail traders came out yesterday and decided to play their hand at “short market maker” or I mean sell a stock or market short, the stocks ripped their faces off in a record way. I was wondering WHY Crude Oil CL wasn’t participating yesterday as the Dow rallied 600pts, —but we find out today, that it was setting up to set its own record! The traders as of late are used to a Crude Oil, where every rally, even .38 bounces higher are slammed lower, but today, the bulls brought a record short-covering surge against the bearish traders.

I will close with the same exact closing I did yesterday, hey why not, it worked, but although I think long term we could bid higher, I know nothing, and I will be active and trade it accordingly. I do not give investment advice, I can just say my opinions and give you an idea how I am looking at things. Right now let’s say I am or were to be long, I would bet I own some puts for protection and BP/Margin effects, since we are moving 10% swings in a day… but at least it’s higher if you are bullish 🙂 — and it’s not over, (they are futures), better now than over a sketch thanksgiving holiday break…

So, now where does CL go tomorrow? What will make it move? Take a look at the futures at 5pm and let’s figure it out.

Let’s try again tomorrow. – Happy Trading.

-Bret Rosenthal

Follow @TheMarketQuote