What a 50 point gap does to SPX right at the range highs.

The markets, and crude oil in particular, have reacted to more weekend news. Specifically, oil fell off a cliff due to, wait for it, a bomb not being dropped.

Seriously though, it is more likely down to the fine print of the straits not being any part of a peace deal. But I like the fun headline.

Elsewhere, the VIX completely collapsed on Friday with the market’s “oh for fuck’s sake” u-turn. Again. Will there be any follow through? Given this market, probably not. Although now I have said that, probably so.

[hard eye roll]

Overall the market fuckery continues, and the strategies are still pulling the premiums.

PopPop.

Right. Where does that leaves us this morning?

Stock index futures are gapping up small to none, depending on the index. Uncle Russ is shrugging off the news completely. Gold remains in a French “meh” mode while nonchalantly smoking a Marlboro Light.

• ES (SPX): 7,559.50 / +0.75% / gapping into the range highs, full read below

• YM (Uncle Dow): 53,029 / +0.96% / gapping up with the rest

• NQ (NazQuack): 28,527.00 / +0.85% / small gap, still well off its highs

• RTY (Uncle Russ): 2,958.40 / +1.02% / shrugging the news off, full read below

• VIX: 15.97 / -0.19% / completely collapsed on Friday

• GC (Gold): 4,111.40 / +0.31% / French “meh” mode

• CL (Crude): 79.59 / -8.31% / off a cliff, full read below

• BTC: 62,712.39 / -1.24% / drifting lower, no read today

SPX: Gap Higher, Trade Lower?

SPX swings are currently in bull mode as of Friday.

Today’s potential gap at the opening for the cash market could be as much as 50 or so points, which takes it right to the longer term range highs zone.

So I am thinking gap higher, trade lower. Like we saw last Monday. Which also gapped on a non news event.

7550 looks like the psychological level for the bulls to jump through.

Gap higher, trade lower. Same as last Monday.

Uncle Russ: The Channel That Could Break The Cycle

RUT is the same patterns, but a little clearer to read, as usual.

Very clear descending channel. The system is already in bear mode, and there does not so far look like there are any pre market movements to get excited over.

Lower highs. And a PnF double bottom trigger below 2900 could see RUT finally push more and break the yoyo cycle.

Lower highs. Below 2900 breaks the cycle.

Crude Oil: Off A Cliff, Because Nothing Happened

Crude oil reacted to the weekend news, and it did not react quietly. Down 8.31%.

The fun version is that oil fell off a cliff because a bomb was not dropped. I kid ye not.

The serious version is that it is more likely due to the fine print of the straits not being any part of a peace deal. Which is a rather more sober explanation and nowhere near as good a headline.

Either way, Friday’s push toward $89 has been comprehensively undone over a weekend in which, as far as the oil market is concerned, the main event was an absence.

Off a cliff. Because nothing happened.

Premium Poppers: Friday’s Wall Of Wins Was Full To The Brim

Friday’s Wall of Wins is full to the brim again, despite it being a turn around day.

We saw a clear, clean and quick breakout on both SPX and RUT to the bear side. Standard fast moves and quick profits, again locked in by myself and the community at large.

The board was busy.

Don closed the SPX Bear at 50%, and noted there might have been more in the move down. Mary closed a bull SPX swing for 75% at the opening bell, then posted the line of the month: her last loss was twelve trades ago, 11 from 12 wins and still going. James had the RUT TnT set to 50% and closed at profit, having earlier had doubts on a setup, stayed out, and been glad he did. Which counts just as much.

Chris locked in the 0.55c profit on both RUT and SPX and turned them into butterflies, having started life as standard OTM Premium Poppers. He also had a cheeky AMZN earnings trade on overnight that he closed at the open. And he was so close to the RUT bullseye, having converted his OTM entry rather than ATM. Close but no cigar, but two banked winners to end the week and the month.

Josh went 3 for 6 on the week and is still getting used to the system, which is exactly where you should be in your first weeks. And Jonathan finished his very first week with us.

Awesome work yet again team. A glorious way to close out the week and the month.

Clear, clean, quick. Locked in from the road.

Students are smashing the results, AGAIN!

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Fun Fact

Jonathan asked in Slack on Friday whether the opening range breakout really holds up long term. I mentioned the godfather of opening ranges, Toby Crabel, and his book from the early 90s. Here is the bit I did not have room for.

The book is called Day Trading with Short Term Price Patterns and Opening Range Breakout. Traders Press, 1990. It is the work that put ORB on the map, built on computer-tested studies of the relationship between the open, high, low and close, which was serious computational effort in 1990.

And then Crabel went quiet on it. He built one of the most successful managed futures firms in the world, and the book was never reprinted. Original copies now change hands for eye-watering sums, largely because the man who wrote it stopped wanting people to read it.

Which tells you something. He did not stop publishing because it stopped working.

Source: Traders Press, 1990. Openlibrary and bookseller listings.

Trade well,

T2 Markets

p.s. Want full access to the SPX Income System (includes 7+ mechanical income strategies)? Join our team now!