Welcome to our inaugural episode of The Futures Rundown brought to you by T4 Futures and Options.
With your host Mark Longo and guest John Seguin,
-
Senior Technical Analyst and Educator at Market Taker Mentoring
The Trading Pit
- Looking at what is trading in the futures markets (rates, FX, equities, cocoa)
Futures Free for All
- What elements of futures trading are the most intimidating
TRANSCRIPT
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The futures markets can be downright scary.
Limit up, limit down.
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And now it’s time to break into the futures markets.
It’s time for the Futures Rundown.
All right everybody, that music means it is time to kick off the newest addition to the network here.
Yes, it is time once again for the Futures Rundown.
The program for you out there, maybe your future’s curious, maybe your future’s intimidated and you want a little help taking those first steps.
Maybe you’re a seasoned vet either way.
Got you covered here on the Futures Rundown.
My name of course, Mark Longo from theoptionsinsider.com as well as from the old network that continues to grow.
Thanks to all of you out there who continue to subscribe and listen.
You’re the best making the Futures Rundown.
The hit that it is, remember if you want even more in your lives beyond the on-demand side, which has nearly a dozen shows coming at you already, you can always head on over to the pro, theoptionsinsider.com/pro.
That’ll get you two additional programs.
Of course, the pro Q&As.
We get to pick the brain, some of the best names in the world of options and derivatives, as well as of course, options oddities where we break down all sorts of fun on the unusual activity front and a whole bunch more.
Theoptionsinsider.com/pro, the place to go to learn more as we learn who’s joining us on the old Futures Rundown this week.
He is a newcomer to this program.
He has joined us on the network in the past, but it has been quite some time.
It’s been all the way back in the before times, the pre-pandemic era back in 2018 when he joined us on Twi-Fo.
So, it has been some time, but we are joined once again by John Seguin, the senior technical analyst and educator over there at Market Taker Mentoring, what the cool kids call “ntum.”
John, welcome back to the network, sir.
It has been too long.
Thanks a lot, Mark.
Appreciate being here.
I was just chatting with your better half, Mr.
P, about an hour ago over there.
He said all sorts of horrible things about you.
I’m not surprised.
Well, John, since you have joined us, but it has been quite some time, obviously a lot of new listeners joining the network since November 29th of 2018.
Lots happened since then.
But also, this is a new program, so obviously your first appearance here.
So, why don’t you go ahead and kick it off.
Tell our listeners a bit of an overview of your background in the world of Futures, sir.
Okay.
Back in, say, the middle ’80s, I took a job, a summer job at the Chicago Board of Trade.
I was going to be a high school teacher.
It was so thrilling and scary getting on those trading floors.
I just never left.
So, I made a career.
I just kind of went through the up the ladder, did a lot of technical work, fundamental work.
It was really some of the best schooling you could imagine, learning economics, technicals, and how to read a trading pit.
So, I developed my own charting system.
So, I put all those things together, and I’ve been writing newsletters.
I spent most of my time in the 30-year bomb pit, a little time in the S&P, some time in the green room, but most of it in the interest rate space in the ’80s when the 30-year bomb pit was, I think, the biggest pit on the planet.
So, I’m well-versed in interest rates, and I believe interest rates are what make the world go round.
So, it’s a good place to be because I look at a bunch of other markets, peripheral markets, that move or correlate with what happens in interest rates.
So, I do most of my analysis, and I spent a fair amount of time traveling with an economist.
So, I look for the correlations in currencies, equities, precious metals, even energies for that matter.
So, I really take a wide look at the markets to come up with, I write newsletters every day for futures, and so I send those out using a really short format, short and sweet.
As a broker, I know traders did not want to hear you read a book to them, just get it done, tell them what you want, quick, and either put the order in the pit or get off.
And so, I’m pretty terse when it comes to my analysis because I do a lot of it.
Yeah, that comes from the floor trading background.
You didn’t have a lot of time to analyze things.
You had a few seconds, right?
No, you didn’t.
So, you couldn’t really spend days or weeks like the upstairs guys thinking over a trade.
You had to do it.
That was it.
Yeah, right.
Now, I mean, seconds mattered so much.
So, if you really learned how to prepare yourself, you almost didn’t think when you had to execute a trade, you just kind of did it instinctually like an athlete just sometimes reacts and doesn’t even, they don’t think.
It’s just they practice it so much, you just react quickly and decisively.
Well, you said the markets were so scary.
It’s one of the things that lured you back in and made you a lifelong futures trader.
Quick time to join us then, John, as we are heading into our pre-Halloween episode really, as we dive right on into the trading pit.
It’s time to break down all the action that’s lighting up the futures markets this week.
What’s limit up and what’s crashing and burning?
Let’s find out.
It’s time to enter the trading pit.
All right, everyone.
Welcome to the trading pit, the portion of the show where we do just that.
We break down what the heck is trading out.
I’ll get to all the winners and losers in the volume and all that fun stuff in a second.
But John, as our guest, you get pride of play, sir.
What is catching your eye in the world of futures this week, sir?
First of all, I think every trader should realize that fundamentals move markets, right?
Technicals are sort of an aside to that, right?
So if we don’t have big events that are going on right now, you have to be talented or be skilled in your technical reads.
But for right now, where we’re at in the futures markets, what we had today with the GDP report, tomorrow we have a big, big day with the initial claims are becoming sort of an important event because of the Fed switching its focus to employment data instead of inflation data.
Nonetheless, we still get the Fed’s primary inflation gauge tomorrow.
So making a big bet right now in either equities or treasuries or even foreign exchange, particularly the dollar, is kind of a dangerous thing to do.
It’s more like gambling than trading.
But I do have some ideas on what you can watch for tomorrow and even through Friday, the Non-Farm Payroll Report, which the last time we had one, it was the high for the rest of the month in treasuries, it can set the tone for an entire month.
So I thought maybe I would just give you some levels to watch for the next two days that will tell you whether there’s been a change in trend, particularly in interest rates, the US dollar.
Gold has been an incredible rise.
We can talk about that if we have time.
But anyway, so I want to talk about the 10-year note.
It’s the highest-following contract, I think, from the CVOT or the CME Group.
And so the trend recently, really through all of October, where prices were going down and yields were rising.
So we know that sellers have been really in command.
And so I look for a key resistance level, right?
And if this trend lower is going to reverse, and when prices rise, that means interest rates are going to go down, then you look for a critical price.
So what I came up with was $111 in the December futures for the 10-year note.
You want to watch that for the rest of the week, because a close above that would tell us that this higher rate cycle that we went through in the past month is rolling over, and it might be a good time to start buying treasuries again.
They’ve been beating pretty hard, and they’re starting to show that they’re shifting to neutral.
But you can’t make that assessment until you get through a non-farm payroll report.
So I would tell you everything for me is based off of $111 for the D futures.
And then a neat thing about that, if you look at the dollar index futures, right?
These things coincide or correlate very, very closely.
So also through the week, the dollar index has been rising along with interest rates.
The chart almost looks exactly the same, but inversely to the treasuries, right?
And that one is starting.
So the US dollar, what’s going to change that momentum?
Because if the dollar goes down, that means rates are going to go down.
So now I got to find a critical support level for DX, right?
Which I have coming in at about 103.80, and that’s the December contract as well.
If the 10-year note gets above 111, about the same time, you would get the dollar index show weakness.
And that could be a huge sign for how we’re going to go into November with interest rates.
The interest rates might go down for a while, or at least stabilize where your good trades might be neutral option strategies that favor the short side for the dollar, and maybe a neutral positive strategy for the 10-year note or any of the five-year notes, 10s or bonds.
Those things can– well, they’ve been correlating closely, so I keep a really close eye on those.
As for the equity indexes, of course, the trend’s been higher, although it’s been stalled for about two and a half weeks now.
I thought I’d give you some critical levels in the mini S&P or just the S&P.
And the levels that I think are truly important right now is about 58.30 in the D’s contract.
So I’ll be– if we get through this non-fire payer report and the data tomorrow and the earnings reports, and the S&P is holding above 58.30, the overall trend higher is still intact.
It may be paused right now.
It’s really been a tough trade in the S&P with– do you get a day up, a day down, a day up?
A five- to two-day trend has been nearly impossible for the past couple of weeks.
But hopefully, we’ll get out of this consolidation phase.
And like I said, if interest rates start to go down, then there’s a pretty good chance the equity indexes are going to take a ride back up to all-time highs.
The lower rates should benefit the equity indexes.
Of course, the NASDAQ has done quite well.
I’ll give you a NASDAQ level that would maybe change the longer-term momentum heading into November.
And where I’m looking at that for the NASDAQ contract, it’s a little bit tougher.
But as long as that market’s above like 203.50, that market looks fine to me.
Again, when you have markets that have been trending as well as the equities have, you got to look for a support level.
And then if that’s violated, you understand that the trend has changed.
It hasn’t happened in a long time with these equity markets.
They go through holding patterns, then they bust up, then they go through a holding pattern, almost like you’re going through flights of stairs.
And so that’s the level I’ll be watching for the rest of the week.
And the NASDAQ is far from that support level.
It’s because, well, the tech sector has been killing it lately.
And then for the Dow, which has been beaten up pretty good, there’s a very different look between these indexes, which means to me that you’re not going to get a really, really strong chance until they all start moving together.
This morning when I wrote my letter, S&Ps were flat.
I had a positive view of NASDAQ and a negative view of the Dow.
And typically you won’t get a very good trend if all three indexes aren’t at least doing something similar.
Anyway, for the Dow, I would look at about 422, I think, no, 42,200.
That’s the critical support level that could, for the first time in a while, have us really break a critical support level from a monthly view.
So that’s what I look at, gauge short and long-term momentum, and then find out where that momentum flips over.
And the Dow is closest to knocking on that door.
This is why we’re at some critical, not only fundamental events, but don’t forget you got the election next week.
And then we got on Thursday, normally we have the F1C policy statement on Wednesdays.
We’re getting it on Thursday because of the election here.
So there’s a lot of big events coming up, and it makes traders nervous, uncertain, and they stay with very speculative trades.
You’re not building new positions here.
I had experience with this.
It’s like, hey, can I make an average day range?
I mean, that’s about the extent of it.
They’re not looking for an average week’s range or even longer, these kind of things right now.
That’s why you see such a erratic price action.
Man, if you can make 50% of an average day range in the equities right now, you’re killing it because they’ve been so erratic.
Let’s see.
I’ll talk about gold because it’s been such an outstanding ride.
I mean, I’m going back to the early September, but if you went through the whole year, you’d see gold has been just on fire.
And there’s a lot of reasons why.
People on the US dollar, who knows what it’s worth now, we print so much of it.
So gold is like a currency to central bankers around the globe.
So they’re loading up on this stuff.
And plus, it’s where traders flock to when there’s chaos and conflict.
And we’ve certainly got enough of that around the globe.
And plus, we’ve got this election coming.
So the safest place to be, what’s thought to be a flight to quality would normally be treasuries and gold, but they’ve separated.
They normally would move together, but gold is going at speeds higher that I can’t remember seeing.
And I have to believe it’s a very protective investment that if you’ve been on this ride, you’re having a great year.
And I’m still not seeing any sign that sellers are interested in gold or even silver.
Silver has kind of shifted to neutral.
But gold is just– it’s on a meteoric rise.
So when I see something like this, because I grew up in the trading pits, when a market’s moving fast and going higher, I’m looking for a reason to sell it.
I mean, that’s just the nature of the beast when you’re in trading pits, that you want to be the guy that picks the high.
So there’s a couple of things I want to tell you that maybe if you’re looking for changes in markets is one of the things that when markets are rising, they tend to make their lows in the first hour of the day.
It’s the most liquid time of day.
When I used to do my big ticket orders in the trading pit, that’s when my biggest customers would put orders in, because with the liquidity and the volume very high, you could get big ticket orders done without affecting the market much.
If you did it around lunchtime, when the volume– you might move the market far against your position if you had a big ticket order to buy.
So I really pay attention to first hour highs and lows, because 70% of the time, your high or your low for the day is going to be made in the first hour.
So that’s kind of a neat stat.
And then the other one is– the other high-piling time of the day is the close.
So how the market moves, it kind of reveals, honestly, which way the institution of traders are leaning.
For example, if the market’s rising, generally, the low is made in the first hour.
There’s an extension higher after the first hour, and the market’s often closed at a fair price of the day or higher.
So those are the three momentum indicators that I learned to use by watching the trading pit along with charting by hand before we had computers on the trading floor.
Or you didn’t have much room on the trading floor.
You really couldn’t hold a computer.
Plus, it would have been the size of Volkswagen back then.
So what I would look for, if you’re looking at precious metals, if you start to see highs being made in the first hour– because we’ve seen a lot of lows made early, extension higher.
So when you know when a trade is capitulating, that’ll change.
You’ll start to see highs made very early in the day, and extensions lower after that.
But that’s a sign that a market’s gone high enough to entice sellers.
That’s what markets do, right?
They keep going higher until they entice sellers, or they keep going lower until you see some sort of reaction or response from buyers.
That’s what markets do, right?
If you didn’t get responses like that, they go in one direction all the time.
So that’s a way to tell there’s a subtle change for any market.
I do this with ETFs, stocks, any market.
These are things I learned from the trading pit that I use to this day.
And when I write my newsletters, that’s how I get my reads on momentum.
Being on a trading floor, the luxury was that you can look at a pit and you can see which brokers– like it was J.B.
Morgan or Goldman Sachs– you could see which way they were leaning.
All you had to do is look at their hands.
If I could see their knuckles, I knew that they were trying to sell.
And if I could see their palms, I knew they were looking to buy.
And so by seeing that and then seeing what it looked like on a chart, I’m able to translate a pit price action or the auction process in a chart.
Because we don’t have pits anymore.
You don’t get that luxury to see– that’s how we got paid good commission by saying, hey, I’ve been watching Goldman Sachs buy for the last half hour, or J.P.
Morgan selling, or– that kind of information was valuable to the clients off the floor– the fund managers, the bankers, and all that other stuff.
And that’s why they called down to trading floors to see what order flow was.
So I believe you can see what goes on in a trading pit with the right techniques.
And I prefer a 30-minute chart for reading intraday momentum and the changes in trend.
And so that’s– when you’re looking at trends like gold, you want to know it’s nearing an end, you’ll start to see highs made early and maybe closes closer to the lower quadrant of the day.
That’s a sign that sellers are operating.
Well, John, I can tell you, you’ve been living that futures life.
You said you don’t have a lot of time to analyze.
And that’s true.
You really got into some very minute indicator, which I like.
And also, I love it because you’re talking still about non-farms and all these other very near-dated events when everyone else I have on the network right now is really focused on next week, right?
It’s the big election.
That’s the way catalysts are all– but in the futures world, that’s still an eternity away, right?
Yeah.
I mean, I wish I could show you a chart I’m looking at right now, the 10-year note that after the Fed had lowered interest rates, you would think, OK, it’s going to be steady or go higher and yields go lower.
And all of a sudden, the non-farm payroll report came along and the market spiked down so hard and never recovered this month.
So I think it’s really important that everybody know how– because the Fed told us they shifted to a stance of watching employment data instead of inflation data.
So this could really set the tone for weeks.
And so I think the most important number– it used to be back in the ’80s, ’90s.
The non-farm payroll report was like the Super Bowl every first Friday of the month.
And I think it’s coming back to be that really important statistic because, you know what, it’s going to force the Fed’s hand.
And what happens with the Fed– interest rates make the world go around, and the Fed’s in charge of moving them.
So the non-farm payroll report can alter their monetary policy decision.
And that’s why tomorrow or Friday is going to be a big deal.
Yeah.
If you’re an intraday futures swing trader, you have a lot of sessions between now and next week.
Yeah, you do.
You still have to worry about it.
I’m saying, are you really going to get a good trend out of it?
You might be– if you get a good read on Friday, you might be able to carry a trade for Monday and Tuesday.
But when the election results start coming in at night, do you want to be carrying a whole new– a brand new trade?
That sounds like gambling to me, not trading.
Yeah, there certainly is some of that.
And hopefully, by our next show, next week, listeners, we will have an outcome, a definitive outcome for the election one way or the other.
We won’t have any of this lingering uncertainty like we’ve seen in the past.
So hopefully, by next show, next week, we will know.
By the way, if you want to tune in for more information, listeners, we will have our live election night extravaganza.
Should be fun.
I will be joined by a whole host of people.
So we’ll be breaking it down every which way and then some.
So just check that one out.
Should be fun.
It’ll be live stream.
We’ll also be hitting the network.
So if you want to listen after the fact to me and a whole bunch of special guests, then by all means, check that out.
Let’s check out right now.
What’s lighting up the tape out there this week in terms you could talk upside and downside.
You can talk winners and losers if you want, even though obviously you can be short these contracts at the end of the day.
We’re going to do a top 12 today.
Listeners to the upside because you’ll see in a second why we added two more couple of redundancies in there.
Number 12 this week, which really is kind of like a top 10, is our Midwest Steel, the Dease contract, December Steel.
Number nine, John’s favorite.
It’s gold, the Dease contract and gold.
By the way, Dease Steel up 1.85% this week.
Gold up another 2.5%.
Just when you think gold can’t squeeze anymore out to the upside, here comes gold up another 2.5% this week.
Above it, we have the Dease contract for oats coming in up 2.69%.
Above that we have pork cutout.
We’ve seen this a couple of times on the show now.
The Dease contract as well getting very specific there into the pork side up a whopping 2.94%.
And keeping it in the pork realm with lean hogs, the Dease contract up 5.24% this week.
So livestock at least on the hog side getting a nice little run this week.
Above that we’re going to the world of softs.
It’s lumber, the Jan contract for lumber up 5.65% this week.
Wasn’t too long ago in the height of the pandemic period.
Everyone was talking about crypto and meme stocks and everything else, but lumber was actually the most volatile asset on the planet.
It was moving all over the place.
These days settling down a little bit, but maybe coming roaring back to life this week up about 5.65%.
And then we have the second half of our top 12 listeners.
We have Ether micro, the Nove contract and the Ether regular future.
Obviously listeners up 6.12 and 6.16% respectively.
Now you can see why we’re sticking some extra into our top 10 listeners.
Above it, keeping it in the crypto realm is the Bitcoin futures, the big future up 8.36%, the micro up 8.37%.
So should be in the same ballpark.
Also the Nove contract there.
Above it coming at number two, we have the Dease Palladium contract.
So keeping things precious up 8.43%.
And the number one upside mover this week, we have Coco, the Coco contract managing to usurp precious metals and all the crypto this week, the March contract long-term and Coco up 8.5%.
John, any of those upside movers this week come as a surprise to you, sir?
No, in fact, I talked about the move that gold had.
And not long ago, I think it was like a life changing event.
If you had Coco back in, you know, the beginning of the year, that was one of the greatest rises I’ve ever seen.
And it’s been, I think, in a sort of a coiling phase since May.
And you know, it still looks good.
But I’ll tell you what, if you’re really watching that contract, I would say that the key support level where this whole trend higher might be over 6,000.
If that gets violated, then I believe, you know, you’ve probably seen the best of what’s going on there.
But one of the greatest moves I’ve ever seen this year.
Yeah, it’s been impressive.
Not a market we usually talk about, but it’s kind of inescapable right now.
You can’t avoid it.
We’re talking about the gainers out there in the futures market.
It’s ridiculous.
I mean, you know, I try, I look at that from when it really kind of kicked in, you know, and if you were to just figure out what it would have, if you bought a one lot, let’s say back in February and held it, you know, at least till the rise, it’s like 75 grand you would have made in about with one contract in literally what, a two months?
One, a one lot.
Wow.
One contract.
That shows you it’s been on a good tier listeners.
We might have to spend some time sinking in our teeth pun intended into that contract on a future episode, just because it’s not many people follow Coco and it is kind of an esoteric product, but it is moving.
So it is something very good mover certainly to pay attention to.
Let’s go to the dark side.
Now listeners, what’s what’s lighting it up to the red again.
You’re probably happy if you’re shorting these to the dark side, we go here.
Let’s go.
Number 10 listeners.
Our Bob, our old pal, our Bob, what the heck is our Bob?
Anyway, that’s what our man says in the intro listeners coming in.
Number 10 today, the D’s contract off about 2% this week below it.
Number nine, we have, or really above it.
We have the VIX, the no of contract off about two and a half percent.
I know percent of a percent VIX is a percent at the end of the day.
It drives all people crazy.
You just have to make your peace with it.
Listeners, I get it.
We’ve been talking about that in our ball of view show for decades.
Don’t worry about it.
VIX, no of contract off about two and a half percent.
And then coming in, number eight, we got our old pal WTI, the D’s contract as well.
They’re off 2.6% this week.
Above it, we have the Brent contract, the Jan contract in Brent this time off 2.84%.
So a little bit of a red on the screen for energy this week.
Then above it, we have a Uranium, the Jan contract.
We’ve been talking about this for a little while now, this Uranium obsession is going on out there.
Uranium Jan contract, not quite as obsessed this week off 3.12%.
Then we have a rough rice coming in above it, the Jan contract off 3.13%.
Then Cotton, the D’s Cotton contract.
Again, not a contract we talk about a lot here, but lighten it up this week to the downside off 3.71%.
Then our bottom three listeners, class three milks are going out to dairy off 3.74%.
Then keeping it in dairy with cash settled cheese off the D’s contract off 3.96%.
Man, cheese has been lightened up of late as well.
And then the number one loser red name, dark side, whatever you want to call it this week, listeners, is soybean meal, the D’s contract off 4.19%.
John, when you’re not checking out metals and equities in 10 year, you ever stick your nose in a little cash settled cheese, sir, it’s certainly been moving.
I used to remember when they would report milk and cheese at the Mercantile Exchange.
They traded for like, I don’t know, 10 minutes or something that, yeah, it’s not liquid.
And I don’t mean that as a pun with milk, but yeah, I’ve never traded cheese.
I only buy it and put it on sandwiches.
Another illiquid, like you said, pun intended contract.
But moving this week quite a bit to after having some nice gains, giving back about 4% out there this week.
Let’s do a quick volume rundown listeners and we’ll get into, I know you have some thoughts in the futures free for all as well.
We’ve got to get there as well.
And also our fun Halloween themed poll we have for you folks going right now as well.
Let’s do a quick top 10 most active, actually going to extend this one to a top 12 as well.
You’ll see why in a second.
Number 10/12, it’s our old pal WTI, the D’s contract, about 200,000 contracts coming into the start of the show.
Obviously these are going to increase as the day goes on.
Listen, this is just a snapshot coming in right before the show.
Number nine, we’ve got the three month SOFR D’s contract there as well, 260,000 contracts just in the D’s contract alone.
SOFR puts up some numbers listeners.
Number eight, we’ve got the ultra T-bond, so keeping it in the rates, the D’s contract, 277,000 contracts there.
Then we go to the NASDAQ E-mini, 322,000 contracts on the tape for the D’s contract there.
And at number eight in our 12, we have the 30 year T-bond, the D’s contract, 421,000 contracts on the tape.
Number seven, it’s the ultra 10 year D’s contract, 533.
Number six, the first, you’ll see why we kind of highlighted these.
This is the S&P micro, our old pal, the micro, the D’s contract, 581,000 contracts.
Anything you’re looking at with volume leaders for futures are going to include the micros.
Of course, we all know the micro, not really the same notional value, shall we say, out there.
So 581, a bit misleading.
Nonetheless, it’s in the list.
So we’re coming in at number six this week.
Listen, number five, the two year note D’s contract, 683.
In fact, this is all D’s.
Yeah, all D’s all the time this week.
Listen, it’s two year note, 683,000 contracts.
Number four, we’ve got the S&P E-mini, so the big contract, 711,000 contracts on the tape.
Back to the NASDAQ for number three, it’s the micro, 839,000 contracts on the tape.
Top two, going to be in the rates.
You know it, you love it listeners.
Number two is the five year.
I’m talking about that too often.
1.16 million contracts on the tape outpaced by the big dog yet again this week coming in to start the show.
The 10 year note D’s contract had nearly 2 million contracts already changing hands.
1.92 million to be precise.
John, any surprises there in our most active this week?
Yeah, actually I think the five year surprises me.
It’s nice to see the securities, the treasuries putting up so much volume.
It kind of makes sense to me with, like I said, the numbers that we have coming out that could alter Fed policy.
I can see there might be a lot of hedging going on with these things with the cash positions or something, but those are really respectable numbers.
I don’t watch the volumes as much.
I do kind of have a rough idea where they’re at and which ones are the most liquid.
But I guess five year note shocks me a little bit.
Five year note breaking into our top 10 this week.
Yeah, I think that’s pretty impressive.
And you know, it’s always impressive listeners.
It’s your questions.
Let’s get to them now.
A little bit of the old futures free for all.
Ring the bell.
It’s time to take on all comers in an epic Q&A battle royale.
All questions can enter, but none can leave without an answer.
It’s time for the futures free for all.
All right.
I love that.
It’s just a fun little, fun little transition.
Having some fun with the show here.
Listen, welcome to the futures free for all you folks clearly about your feedback, having some fun as well.
You know how to get at us by now.
We’ll see if we can squeeze.
We probably can’t squeeze all of you, but most of you in on the show this week, let’s kick it off.
John, it is the day before Halloween.
So we thought we’d have a little seasonally appropriate fun.
We know we even say it in the intro.
We know, we know that futures are intimidating to a lot of people who don’t trade them.
They find this market scary for a variety of reasons, John.
So we thought we’d ask them today, what is it about futures?
What elements of the futures market and futures trading are the most intimidating to you?
We gave them three choices and then another where they could add their own John.
We gave them confusing margin.
We gave them the old bug beer of accidental delivery.
We’ve kind of debunked that on this show, but it’s still out there.
We know.
And then the weird and kind of wild products are talking about, you know, cash, settled cheese and uranium, not your typical Apple and Nvidia stock.
Or is it something else?
John, you’ve been in the futures game for a while.
If you had to say, well, all the people you’ve talked to and educated over the years, what would you say is the most confusing elements and maybe most, just most intimidating element of the futures market?
Is it one of these things we have here?
Confusing margin?
Yeah, kind of.
So, so I’ve had experience with illiquid markets.
That’s when they get scary.
And it’s not so much that you get in a trade is trying to get the heck out of one.
So I had an experience with palladium.
You know, it’s a very illiquid market.
I haven’t traded and since that one experience, I had to buy two or three of them, I think was what my system told me.
And I was able to get in one and I couldn’t get in the other.
It moves so far down fast.
The first one made like, I don’t know, 1500 bucks and it must have been 40 seconds.
And then I got short, deep in the hole and I tried to get out of it and they gave it all away.
So I’ll tell you the thing that scares me most about markets.
You better check the liquidity and the volumes.
You want to not and like I said, you want to be able to get in and out.
You want your bid offer spreads to be close enough that you don’t get killed on those.
And you know, I don’t mean to beat on palladium or even feeder cattle, but those can get scary.
You know, if you’re just trying to, if everybody’s running for the same door, it can get pretty ugly and quick.
Liquidity, a good choice.
We didn’t include that in ours.
Maybe for our next poll, we should, we should definitely add that to the list.
You only get four choices on Twitter, John.
So they limit you out there.
But it looks like right now our audience with about exactly two thirds, 66%, they’re saying they’re, they’re scared by the confusing margin, John.
And yeah, I can certainly see that the CME website that can be so confusing.
I not long ago, I retook my series three tests and I had, that was very difficult because they change depending on volatility.
And so you really got to, they post what, what the margins are.
And it’s really important that you understand that if you’re carrying positions overnight, if you’re not carrying positions overnight and you want to be flat, like a local would be at the end, that’s, that’s not a really big concern.
But it has to do with contract size, the bigger the contract.
So for instance, the S&P, the mini S&P, I haven’t looked at the margin in a while, but you know, that could be, you got to have, let’s say it might be a margin of $5,000 for one contract and you want to carry 10.
So you got to have, you have to have an account of over $50,000 just to hang.
So it is important for, for the size of position you’re going to have, that you’re aware, of margin.
You don’t want to margin calls, you know, you just, you got to, you got to stay in your lane knowing your account size and what you can handle.
And I would tell you this guys, these markets spooky a little bit and they should, right?
Because volatility comes out of nowhere sometimes.
I would say get in there and mess around with the micro contracts and get some skin in the game.
They’re very cheap to play.
For example, the S&P, I watch and trade the mini S&P, but they have a micro contract.
So each tick in the S&P is $12.50.
Each point is $50.
That thing’s moving 50 points a day, right?
So that’s, I mean, that can get ugly.
So but if you go to the micro, it’s 10, divide by 10.
So each tick is only $1.25.
And so you can get in there and hang the margins are nothing or very, very cheap.
And if you really want to get your feet wet, they have micros in the bonds, the equity markets, the grains, I believe, metals, all the good ones, man, all the volatile ones.
You know, if you asked me which markets to trade, I’d go 10 year notes, I’d go S&P or NAS, I’d go gold.
And I do micros of all these crude oil, natural gas is a little spooky, but you can try it.
And the grain soybeans, wheat and corn.
I mean, that’s a good portfolio to mess around with.
And you can do micros and not be spooked.
That’s a good poll to do maybe for our This Week in Future’s options show coming up later this week, after Halloween, actually, not on Halloween day, we can still do it.
Which products are the most scary?
I think you just mentioned that gas.
There’s a lot of people.
That might be a fun little poll to do for our audience as well.
So thanks for the idea there, John.
But right now, yeah, the margin, you folks are confused by the margin and I get it.
You have initial, you have, you know, the maintenance, you have the overnight margin, like John was saying.
So it varies.
So that could be a little bit intimidating.
And then we have the accidental delivery, which we’ve said won’t really happen.
You’re not going to get the truckload of soybeans or lean hogs on your lawn in the middle of the night.
It’s not going to happen.
We have debunked that, I think, on this show.
But nonetheless, people are still, I think, a little bit spooked by the prospect of that.
Other people wrote in with their ideas, including Vernon Griffin.
He wrote, he’s just scared about trying to predict these markets.
And he included an old school image here, John, of Johnny Carson as Karnak.
So there we go.
I knew that one would resonate with you there, John.
So yeah, not one you see too often, but a fun one nonetheless.
So get over there, listeners, @options on Twitter.
You can make your voice heard in our fun Halloween spooktacular poll.
We’ve got more comments and questions coming in.
Let’s go out here to Andrew.
Andrew Zell, he says, “Got to put my name in the hat to say I’m loving the New Futures show.”
Wow.
Well, thank you, Andrew.
“There’s great guests and great content.
Keep up the good work.”
Well, thank you, Andrew.
And thankfully, you are far from alone.
A lot of people seem to really be enjoying the latest addition to the network.
Thanks to all of you out there who like what you hear.
If you like what you hear, throw a rating of star in your platform.
It helps new people discover the content out there, listeners.
John, here’s a good one for you.
Maybe I’ll have to bring you back to do an in-depth episode on this.
This question comes from Eli76.
He says, “Can you please do an episode covering the mechanics of intraday swing trading using futures?
I prefer the E-Mini, but any product would be informative.
Thanks for your time.”
And obviously, that’s beyond the scope of the time we have remaining today.
But what do you think?
You want to come back another day and we’ll do a deep dive into it?
I’d love to.
I have some– I’ve actually written an automated trading program that is– I think you have to think about this, guys.
So if you’re going to be intraday trading, I got no problem with it.
But you should know what you’re competing against.
And with all these algorithmic trading systems, black boxes, all these other things, and the speed of computers, that that’s who you’re fighting when you’re– what they call high-frequency trading.
Now, I write newsletters just specifically for day traders or maybe a trade that might last for three days.
So I absolutely have an opinion on this.
I can tell you how– what I do to maybe wait for certain patterns that often show up just before markets go vertical.
Because they’re up or down, I don’t care.
But you want to look for– markets can be very fractal or erratic.
But when certain patterns that I’ve noticed over the years– and it’s usually like a two- or three-day pattern shows up, I’ll see moves that might extend at least the length of an average day and sometimes the length of an average week.
But I’m very patient, and I wait for them.
That’s why I look at so many markets.
And out of maybe 50 markets, I might get five good signals in a day.
And sometimes I might get two or none.
But yeah, I’m very strict about if I’m going to be playing, looking for some kind of breakout, I could talk you through that.
I know we can’t do pictures here.
But I could talk you through how my system started and maybe how you can be a little bit more patient.
And I can tell you short-term directional stuff too.
If you want to intraday trade, I have some ideas on that.
I just don’t do it anymore.
I used to.
But I’ve kind of expanded into trying to do trades that might net me– my ultimate goal or home run trade is if I can net the length of an average week, right, that I feel like I killed it.
I just killed it.
That’s like a grand slam.
But I have techniques that I teach and that I could absolutely articulate to you guys.
And I’d like to do it too.
It’s fun.
All right.
Well, there you go.
Who was that?
Eli 76.
You already got a little bit of a taste of your answer.
We’ll have to have John back on one of these days.
We could do a deeper dive.
All right, John, we’ve had listener requests for a whole episode about all things sofa.
So I think we’ll have to do that.
Then we’ll have to have another one about swing trading.
So the folks are clearing what they want, John.
They are a demanding bunch.
We love it.
We’re here for it here.
Unfortunately, listeners, that music means we are out of time for the show this week.
Thanks to everybody who’s tuning in and rating and reviewing and sending in questions.
Keep them coming.
We’ll be back again tomorrow, of course, with our usual doubleheader of the end.
The option block as well as this week in future options Friday.
Of course, a little bit of all talk and then back for our pro members for options oddities.
You can of course find that episode, the options insider dot com slash pro and John, we were talking about your newsletters and a lot of cool stuff.
Where should folks go if they want to check those out for themselves?
Well, actually, so you can I have a website called the macro graph dot com.
M a c r o g r a p h.
I’ve got my unique charting program on there that I let people use for a while if they’re interested in it.
But there’s some educational videos on there.
If you register there, then I’ll know I’ll get an email that says that you did.
And if you like, I can put you on my list.
Try it out for a few weeks to look at the newsletter that I send out.
It’s very short and sweet and covers the main ones that I talked about today.
And it’s for speculating for day trading.
So I can’t show you what my chart’s on the show.
But if you go over there, I’ll show you this short, sweet.
It’s a bunch of bullet points and reads on momentum and to support to resistance and a pivot point and make it real simple.
There you go.
It’s just macro graph dot com.
Yes, macro graph dot com.
Also, of course, check out what Dan and the team have cooking over there at Market Taker.
Don’t forget the second T for Theta.
So we always say on our options boot camp show list.
And of course, while you’re checking things out, head on over to CTS futures dot com.
Tell them you heard about them on the futures rundown.
They’ll be very excited to chat with you over there.
A lot of cool stuff they have in the offings.
All these products we’re talking about, all these tools are talking about and a whole bunch more.
You can find it over there.
CTS futures dot com is going to do it for us today.
I’ve said back again with our usual array of content on this Halloween spooktacular week back again next week before the futures rundown with our live election spectacular.
So if you want to tune in, have somebody maybe talk you off the ledge.
Maybe your candidate isn’t doing well.
Maybe they are either way.
Maybe you just want to focus on something else.
You want to look at it through a market’s lens with some fun people who can help talk you off the ledge and have a good time doing it.
Join us for the live election spectacular next Tuesday, of course.
Then we’re back again next Wednesday.
Hopefully we all know what the heck happened the night before with another episode of the futures rundown.
Stay safe out there, everybody.
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