Carl Futia

Update

2009-11-16T13:41:00.006-05:00

Here is an hourly bar chart showing day session e-mini trading going back to late September. The short term trend turned upward in early November as you can see from the succession of higher trading ranges (blue ovals). I think midpoint resistance at 1126 and the top of the trend channel will be reached in a few days (green oval). Some sort of reaction is likely to begin there but I doubt that it will carry the market lower than 1075. In any event I still think the 1170 level will be reached early in 2010.

Elliott and Me

2009-11-16T12:53:00.003-05:00

I first starting learning and trying to apply Elliott wave theory back in 1966. I became quite expert in its application and often discussed it in my forecasting letter, The Cyclic Forecast, back in 1977-83.

But while I think Elliott is a beautiful theory, and often can give insight into the market's position in longer time frames, I think it is a distraction for short term traders. Here is the problem. To be successful as a trader you have to tune in to the market's message about the current supply-demand balance. By this I mean that you have to be able to use the market's action to judge whether longer time frame traders have above-normal long positions (trend up) or below-normal long positions (trend down).

How is this information conveyed? By the progression of trading ranges and by the direction of unusually long, uncorrected moves in prices. Everything else is simply an attempt to interpret the market's message in artificial ways. I think most computerized technical indicators are among these "artificial ways". Elliott wave theory is also in this category as are cycle theories, astrology, etc.

The problem with using Elliott, technical indicators, etc. is that they at best distract you from the market's supply-demand message, and at worst deceive you about this message.

There were very successful traders before computers, before Elliott, before almost all currently popular approaches were invented. Ask yourself this. On what did these traders base their market insights?

So I say look for what has stood the test of time, for methods that don't obscure the market's action with a lot of complicated formulas and rules. This is what you need to know and apply in order to interpret the messages markets are sending you.

sold one unit at 1108.50

2009-11-16T10:08:00.001-05:00

Long one unit at 1100.25

2009-11-16T09:36:00.000-05:00

Guesstimates on November 16, 2009

2009-11-16T08:41:00.001-05:00

December S&P E-mini Futures: The day session range estimate is 1093-1108. I expect to see this rally reach the 1126 level within a few days.

QQQ: Support is at 41.10. Next upside target is 45.60.

TYX (thirty year bond yield): I think this market has begun a move to 5.00%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.30%.

Euro-US Dollar: I think a sustained drop to below 120 is about to start.

Dollar-Yen: I think the 87.13 low will hold and that the yen will soon begin a move to 105.00.

December Crude: I think that crude is headed down to 50.00. Resistance is now at 81.00.

GLD – December Gold: There is still no sign of a top in the making. Next upside target is 1165. Meantime support is at 1075.

SLV - December Silver: Continuation up to 1900 is likely.

Google: Support is now at 490. Next step upward will carry to 610.

Screw up! - sale at 1090.25 of long unit reported everywhere but here!

2009-11-13T15:06:00.003-05:00

I just noticed that my sale of one unit at 1090.25 was posted by mistake on "The Art of Contrarian Trading" instead of on this blog. So sorry. However if you look to the right on this blog you will see that I did report the sale on Twitter in a timely manner.

Added later: I have now erased this trade report from "The Art of Contrarian Trading".

Update

2009-11-13T14:58:00.002-05:00

The e-minis have dropped on increasing volume from the day's high at 1096. This has opened up the potential for a drop to 1075 or so, the lower limit of what I could see and still think a move to 1126 is underway. If the e-minis close within a point or two of 1087 and then open unchanged or higher Monday I would expect to see a bullish day Monday. A close below 1085 would make it likely that we'll see 1075 before the advance can resume.

A review of my book

2009-11-13T12:20:00.002-05:00

Here is a very kind review of my book by someone I don't know and have never met. You can check out the rest of the Amazon reviews by clicking on this link.

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1 of 1 people found the following review helpful:

A Grateful Reader, November 12, 2009

By	Trading Truth Seeker "K" (Wesley Chapel, FL) - See all my reviews

Back in 1990 I read an article in the July/Aug issue of the Commodity Traders Consumer Report(CTCR)that forever turned my trading mindset around. Carl Futia wrote the article. And no, I don't personally know Mr. Futia, and I have no interests financial or otherwise in his world. But in my 25 years of trading, I can honestly say that this article helped to shape my trading mindset forever. To make a long story short, I'll quote and explain to you the two concepts from that 1990 article that engendered the changes in my trading mind.

Concept #1: Quote: "I had seen clearly that if I relied on oscillators and trend-following techniques, I was always getting into the trend too late. It struck me that I should try to "Anticipate" the beginning of trends rather than waiting to enter in the middle after they had started".

Concept #2: This concept was the idea of "Free Exposure" which Mr. Futia was taught from a seminar by the legendary trader Peter J. Steidlmayer. In essence Free Exposure meant; To enter the market where the risk is the least and the reward is the greatest, one must find, and be able to read where "Value" lies in the market. All entries made at "Value" are essentially tantamount to a "Free" ride in the market, with very little risk "Exposure".

These two concepts started me on my mental journey into what I now call "Anticipating Value" in the market. In any case, back then, after doing months of research and extensive reading on these two concepts my trading was completely turned around for the better. Today, both concepts have melded in one technique, and now form the foundational element of my trading strategy and methodology. Further, since reading this new book, I can see that most of his ideas have since matured into a cohesive philosophy, worthy of anyone's personal library. And by the way, my personal library once numbered over 800 books, so I believe I know a good one when I see it.

Thankfully, I too arrived at some of those same conclusions in his book a long time ago. This is because they were the natural and logical progression from his initial concepts in the 90's. Do yourself a favor and at least read this book, even though you may not agree with it now. Some time in the future, after you have been "sorely tested" in the market for a while, you may be truly thankful that you did. It might just spark a new way of looking at the market for you.

Long one unit at 1092.25

2009-11-13T12:09:00.001-05:00

Guesstimates on November 13, 2009

2009-11-13T08:50:00.000-05:00

December S&P E-mini Futures: The day session range estimate is again 1085-1100. I expect to see this rally reach the 1126 level within a week or two.

QQQ: Support is at 41.10. Next upside target is 45.00.

TYX (thirty year bond yield): I think this market has begun a move to 5.00%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.30%.

Euro-US Dollar: I think a sustained drop to below 120 is about to start.

Dollar-Yen: I think the 87.13 low will hold and that the yen will soon begin a move to 105.00.

December Crude: I think that crude is headed down to 50.00. Resistance is now at 81.00.

GLD – December Gold: Gold has reached the 1120 level but there is still no sign of a top in the making. Next upside target is 1165. Meantime support is at 1075.

SLV - December Silver: Continuation up to 1900 is likely.

Google: Support is now at 490. Next step upward will carry to 610.

Update

2009-11-12T14:43:00.004-05:00

Here is an hourly chart of day session e-mini trading going back to late September. The market has stalled after taking out its last top at 1099 (electronic) by 4 points (higher of the two horizontal, red dotted lines). The question now is whether the market is preparing for a move all the way back down to 1026 or whether instead it is ready to advance to my initial 1126 target (green oval).

Hesitation near a previous high is normal. Take a look at what happened in early October as the market approached its then previous high at 1076 (lower of the two horizontal, red dotted lines). The e-minis broke about 15 points before recovering and moving up to the 1099 high a week later.

In the current situation I am allowing the market to break as much as 25 points before I would give up (temporarily) on my 1126 target. A break as big as the biggest day session break during the current rally would take the market down to 1086 or so (where it is currently trading) (purple rectangles).

It looks like today's trading range will be visibly below yesterday's. This would break the pattern of steadily rising trading ranges (blue dash ovals). However, I generally am willing to tolerate one, maybe two, ranges in the "wrong" direction before I figure the trend has reversed. Since no supply shock is yet visible this is what I will do now.

All in all, the drop from 1103 still looks like a correction in an up trend and I think this market will reach the 1126 level in a week or so.

sold one unit at 1092.50

2009-11-12T11:11:00.001-05:00

Long one unit at 1095.50

2009-11-12T09:31:00.001-05:00

Guesstimates on November 12, 2009

2009-11-12T08:47:00.000-05:00

December S&P E-mini Futures: The day session range estimate is again 1090-1105. I expect to see this rally reach the 1126 level within a week or two.

QQQ: Support is at 41.10. Next upside target is 45.00.

TYX (thirty year bond yield): I think this market has begun a move to 5.00%.

TNX (ten year note yield): I think that the market has begun a swing up to 4.30%.

Euro-US Dollar: I think a sustained drop to below 120 is about to start.

Dollar-Yen: I think the 87.13 low will hold and that the yen will soon begin a move to 105.00.

December Crude: I think that crude is headed down to 50.00. Resistance is now at 81.00.

GLD – December Gold: The market will probably keep going until it reaches 1120. Support is at 1030.

SLV - December Silver: Continuation up to 1900 is likely.

Google: Support is now at 490. Next step upward will carry to 610.

sold long unit at 1094.00

2009-11-11T15:14:00.001-05:00

Repurchased one unit at 1094.75

2009-11-11T13:01:00.000-05:00

sold one unit at 1094.00

2009-11-11T11:12:00.001-05:00

bought one unit at 1099.50

2009-11-11T10:05:00.001-05:00

Guesstimates on November 11, 2009

2009-11-11T09:00:00.000-05:00

December S&P E-mini Futures: Today is a bank holiday in the US so trading will be slow. The day session range estimate is 1090-1105. I expect to see this rally reach the 1126 level within a week or two.