Would you like to inspect the original subtitles? These are the user uploaded subtitles that are being translated:
1
00:00:14,640 --> 00:00:17,160
Welcome to lesson seven folks
in the swing trading model.
2
00:00:17,610 --> 00:00:20,190
This teaching's going to be
teaching the keys to selecting
3
00:00:20,190 --> 00:00:21,360
markets that will move explosive.
4
00:00:27,700 --> 00:00:30,190
Caitlin cover the hallmarks
to explosive swing trades.
5
00:00:31,660 --> 00:00:32,950
And the first in the list of.
6
00:00:34,110 --> 00:00:38,100
Eight things I like to look for
that are going to deliver, in my
7
00:00:38,100 --> 00:00:42,240
opinion, the highest probability for
explosive price moves, where it's
8
00:00:42,240 --> 00:00:44,190
just dynamically moving one sided.
9
00:00:44,550 --> 00:00:45,840
You want to be in those types of moves.
10
00:00:45,870 --> 00:00:50,220
And obviously as a swing trader, we want
to focus on markets that provide these
11
00:00:50,310 --> 00:00:55,080
in terms of the highest probability, what
we look for as the market profiles that
12
00:00:55,080 --> 00:00:59,370
show that the major four asset classes
that mean the interest rate market.
13
00:01:00,120 --> 00:01:02,640
Stocks, commodities and currencies.
14
00:01:02,760 --> 00:01:04,830
They are all trying to trend.
15
00:01:05,250 --> 00:01:06,960
They're not held in consolidation.
16
00:01:07,200 --> 00:01:08,550
They're not at odds with one another.
17
00:01:08,550 --> 00:01:09,480
They're not conflicting.
18
00:01:09,870 --> 00:01:13,980
And if you get one or two of the asset
classes showing willingness to trend,
19
00:01:14,370 --> 00:01:18,270
that gives us a really favorable market
condition to trade in for swing trades.
20
00:01:18,660 --> 00:01:20,700
It doesn't matter that all
four of them were trending.
21
00:01:21,720 --> 00:01:25,020
We want at least to have a see
at least half of the four or two
22
00:01:25,020 --> 00:01:28,860
of them showing a profile where
there's trending environments.
23
00:01:32,045 --> 00:01:33,755
Intermarket analysis, confluences.
24
00:01:33,815 --> 00:01:40,115
This is the approach that using all
the other asset classes to justify
25
00:01:40,145 --> 00:01:45,155
or confirm the ideas that you have
as a trade are in fact in alignment.
26
00:01:45,815 --> 00:01:46,925
So I'll give you an example.
27
00:01:46,925 --> 00:01:47,365
If we think.
28
00:01:48,600 --> 00:01:50,759
There's a bullish dollar underway.
29
00:01:51,119 --> 00:01:56,250
Uh, we should see commodities, therefore
at resistance levels across the, uh, the
30
00:01:56,250 --> 00:01:57,960
major sectors in the commodity markets.
31
00:01:58,380 --> 00:02:01,020
Uh, that means that we're
also going to see commodities
32
00:02:01,020 --> 00:02:03,119
fail, to make higher highs.
33
00:02:03,119 --> 00:02:06,000
Even if they break out, there'll
be false breakouts and we'll see
34
00:02:06,000 --> 00:02:11,280
commodities, uh, very easily breaking
their lows or failing to make a rally.
35
00:02:11,549 --> 00:02:11,790
Okay.
36
00:02:11,790 --> 00:02:13,260
All of those conditions would be there.
37
00:02:13,260 --> 00:02:16,010
If we're expecting to see bullish
dollar, the opposite would be.
38
00:02:16,675 --> 00:02:19,915
If we're looking for a barest dollar,
if the dollar is expected to go lower,
39
00:02:19,915 --> 00:02:23,245
based on our analysis, we will be
looking for commodities to have very
40
00:02:23,245 --> 00:02:29,785
little resistance in terms of wanting
to go higher and strong support levels.
41
00:02:30,145 --> 00:02:30,445
Okay.
42
00:02:30,445 --> 00:02:34,465
So highs, we're going to be broken
on commodities and Lowe's are going
43
00:02:34,465 --> 00:02:38,035
to be supported and very little
breakdown on commodities will be seen.
44
00:02:38,395 --> 00:02:41,755
That would be an idea that would
support the idea of a bear scholar.
45
00:02:42,695 --> 00:02:46,545
Same thing would be said with,
uh, you know, Once we arrive at
46
00:02:46,545 --> 00:02:48,195
that condition for the dollar.
47
00:02:48,465 --> 00:02:52,545
If we're expecting dollars to be bullish,
we would be looking for bear scenarios
48
00:02:52,845 --> 00:02:57,315
where like Euro dollar Aussie dollar
pound dollar, New Zealand dollar,
49
00:02:57,915 --> 00:03:00,105
uh, those pairs would be at resist.
50
00:03:00,880 --> 00:03:01,210
Okay.
51
00:03:01,240 --> 00:03:05,080
And they would be breaking lows and
have difficulty making higher highs,
52
00:03:05,080 --> 00:03:08,200
or if they make higher highs, they're
false breakouts and they trade lower.
53
00:03:08,500 --> 00:03:10,360
That would be supportive of Bush dollar.
54
00:03:10,840 --> 00:03:13,720
Or the reverse would be said for
a dollar that we would bearish.
55
00:03:13,720 --> 00:03:17,890
And then it means that we'd be seeing your
a dollar pound dollar, New Zealand dollar,
56
00:03:17,890 --> 00:03:20,380
all the dollar, those pairs at support.
57
00:03:20,770 --> 00:03:24,910
And they would not be willing to make
lower lows, or if they do they're quickly
58
00:03:24,910 --> 00:03:29,170
rejected and highs in those foreign
currencies would be easily traded.
59
00:03:29,895 --> 00:03:30,135
Okay.
60
00:03:30,135 --> 00:03:33,255
And that would also support the idea
that weak dollar third on our list
61
00:03:33,255 --> 00:03:35,505
is the cot hedging program alignment.
62
00:03:36,275 --> 00:03:39,945
This is where we look back in the
last 12 months on the net positions
63
00:03:39,945 --> 00:03:41,205
held by the commercial traders.
64
00:03:41,685 --> 00:03:46,305
And then we get a range over the last
12 months with the highest level was
65
00:03:46,305 --> 00:03:50,415
in the lowest level for their holdings,
regardless of their net short and long.
66
00:03:50,775 --> 00:03:53,235
And whatever that range
is, we divide that in half.
67
00:03:53,235 --> 00:03:55,485
And then we define that in terms
of being bullish or bearish.
68
00:03:56,475 --> 00:03:58,275
If we are supporting the idea that.
69
00:03:58,920 --> 00:04:01,380
Foreign currencies are going
to go higher and therefore the
70
00:04:01,380 --> 00:04:02,820
dollar index is going lower.
71
00:04:03,180 --> 00:04:07,980
Uh, we would probably see the cot
hedging program show bullishness for like
72
00:04:08,070 --> 00:04:11,130
Euro dollar cable, um, Aussie dollar.
73
00:04:11,430 --> 00:04:15,990
And the more you see the commercials
holding net long positions in their
74
00:04:15,990 --> 00:04:19,980
hedges or their hedging program, the
more likelihood you're going to have
75
00:04:19,980 --> 00:04:24,390
an explosive move in your favor with a
bullish foreign currency idea in a weaker.
76
00:04:25,560 --> 00:04:30,150
And the reverse would be said in terms of
when you're looking for stronger dollar,
77
00:04:30,869 --> 00:04:36,030
you would expect to see the bearish stance
in the hedging done by the commercial.
78
00:04:36,030 --> 00:04:38,700
And I'll show you examples
that that would make this.
79
00:04:40,705 --> 00:04:41,515
And an open interest.
80
00:04:41,515 --> 00:04:44,995
We look at that because all
of the parents, I trade are
81
00:04:45,025 --> 00:04:46,735
the majors and they're calm.
82
00:04:46,795 --> 00:04:48,325
They're calm down to commodity dollars.
83
00:04:48,835 --> 00:04:52,165
So I can get the insight gleaned
from commitment of traders
84
00:04:52,225 --> 00:04:55,915
and the open interest that
cannot be seen in spot market.
85
00:04:56,725 --> 00:04:59,125
So if we look at the open interest,
we can actually track the smart
86
00:04:59,125 --> 00:05:01,195
money movement of buying and selling.
87
00:05:01,195 --> 00:05:05,455
And I'll kind of go over that again,
in this teaching and seasonal tendency.
88
00:05:06,570 --> 00:05:10,740
We can see that there's times when
there's a very good probability
89
00:05:10,740 --> 00:05:14,190
for markets to want to trade higher
or lower based on seasonality.
90
00:05:14,550 --> 00:05:18,780
And if you can have that in alignment
with your trade idea, it obviously
91
00:05:18,780 --> 00:05:21,480
pushes the probabilities for an
explosive move in your favor.
92
00:05:23,770 --> 00:05:26,110
And we now talk about volatility filters.
93
00:05:26,260 --> 00:05:26,440
Okay.
94
00:05:26,440 --> 00:05:31,000
Now volatility filter is a way of
gauging when the market gets quiet.
95
00:05:31,360 --> 00:05:31,690
Okay.
96
00:05:31,690 --> 00:05:33,970
And, or there's a
contraction in the range of.
97
00:05:34,950 --> 00:05:38,910
If this is seen, what you're seeing is
the market going into contraction right
98
00:05:38,910 --> 00:05:40,980
before a big explosive type of move.
99
00:05:41,550 --> 00:05:45,780
That is a hallmark that
spells wild profitability.
100
00:05:46,170 --> 00:05:47,400
If you get the direction, right.
101
00:05:47,790 --> 00:05:48,060
Okay.
102
00:05:48,060 --> 00:05:49,950
It doesn't mean that you know
that direction because the
103
00:05:49,950 --> 00:05:51,300
markets are going in small ranges.
104
00:05:51,810 --> 00:05:54,990
It just means that you're going
to see another big explosive move.
105
00:05:54,990 --> 00:05:55,800
And if you have the direction.
106
00:05:56,730 --> 00:06:00,060
Many times you're gonna see that Xplosive
moot takes off in a direction you
107
00:06:00,060 --> 00:06:04,380
anticipated based on your major market
ideas, you're in your market analysis.
108
00:06:04,440 --> 00:06:07,440
And with the hedging programs, suggest
by the commercials, are they buying?
109
00:06:07,440 --> 00:06:09,240
Are they selling and open interest?
110
00:06:09,240 --> 00:06:10,050
Are we tracking smart?
111
00:06:10,050 --> 00:06:12,630
Money's buying and selling in
relationship to those ideas.
112
00:06:13,770 --> 00:06:17,730
If that occurs at the same time, there's
seasonal tendency for it to rally higher.
113
00:06:18,030 --> 00:06:21,570
And about until he starts to squeeze
into small little ranges, there's
114
00:06:21,570 --> 00:06:24,060
going to be a high probability that
moves are going to be explosive to the.
115
00:06:27,420 --> 00:06:28,650
Major news headlines.
116
00:06:28,650 --> 00:06:32,610
I like this one because if we have
a condition staged and we think that
117
00:06:32,610 --> 00:06:36,420
the market's going to go higher based
on our major market analysis markets
118
00:06:36,480 --> 00:06:41,969
as a whole on the four categories or,
uh, asset classes, stocks, interest
119
00:06:41,969 --> 00:06:43,740
rates, commodities, and currencies.
120
00:06:44,159 --> 00:06:47,700
If two of the four groups are in
trending environments, because one
121
00:06:47,700 --> 00:06:49,320
can always be held in consolidation.
122
00:06:49,890 --> 00:06:50,940
Uh, not really trending.
123
00:06:51,330 --> 00:06:56,835
Uh, if we see at least half of the four
major asset classes, At least we are in
124
00:06:56,835 --> 00:06:59,475
a good swing trading model environment.
125
00:07:00,195 --> 00:07:04,005
If that happens and we are bullish
on an environment or a particular
126
00:07:04,005 --> 00:07:08,955
market and a news event comes out and
starts jawboning and weak it's weak.
127
00:07:08,985 --> 00:07:12,165
It's not, it's not as bullish or
something's wrong with that idea.
128
00:07:12,405 --> 00:07:13,905
Don't expect it to go higher.
129
00:07:14,205 --> 00:07:16,935
Anything a talking head
would have in their headline.
130
00:07:17,775 --> 00:07:20,295
That to me is fuel on
the fire if I'm bullish.
131
00:07:20,414 --> 00:07:24,105
So if I see there's headlines at
a time when I want to be a buyer,
132
00:07:24,465 --> 00:07:29,115
that to me helps my trade many
times to be explosive in nature.
133
00:07:31,275 --> 00:07:35,565
And lastly, in our list market sentiment,
and all I do is gauge the bullishness
134
00:07:35,565 --> 00:07:40,455
or bearishness based on the retail
universe is a use of indicators.
135
00:07:42,870 --> 00:07:46,560
Okay, let's take a closer look in,
in discussion about major market
136
00:07:46,560 --> 00:07:49,980
analysis and being one-sided and
this being a trending profile.
137
00:07:51,300 --> 00:07:55,650
If we look at the currencies
stocks, commodities, and interest
138
00:07:55,650 --> 00:07:57,930
rates, those four asset classes.
139
00:07:58,995 --> 00:08:01,485
We use those for our intermarket analysis.
140
00:08:01,575 --> 00:08:05,505
But before we get into our intermarket
analysis, we have to look at,
141
00:08:05,505 --> 00:08:08,775
are those markets now trending or
are they held in consolidation?
142
00:08:09,165 --> 00:08:12,525
Again, we're looking for at least
two of the categories to be true.
143
00:08:13,455 --> 00:08:17,475
And if they are trending, that means
that the other two Navy just lagging
144
00:08:17,475 --> 00:08:20,145
and they're going to eventually go into
a training environment to preferably
145
00:08:20,145 --> 00:08:23,145
all four of them should be trending,
but there's not going to be times
146
00:08:23,145 --> 00:08:24,375
where it's going to be like that.
147
00:08:24,385 --> 00:08:27,915
You have to demand at least just
two of the major categories to
148
00:08:27,915 --> 00:08:28,935
be in a trending environment.
149
00:08:28,935 --> 00:08:33,855
If that's the case, then we're going to
see a swing traders environment unfold
150
00:08:33,855 --> 00:08:37,034
in the markets that you've whittled
down through a top-down analysis.
151
00:08:37,960 --> 00:08:40,720
Through the things we're going to talk
about here and then actual process
152
00:08:40,870 --> 00:08:44,600
in lesson eight, it'll give you the
framework and it'll give you the,
153
00:08:44,650 --> 00:08:48,490
uh, the hallmarks that look for to
frame out high probability trades
154
00:08:48,490 --> 00:08:50,410
with explosive nature in price action.
155
00:08:52,030 --> 00:08:57,850
If we see a market asset class, like,
uh, the commodity market being in
156
00:08:57,850 --> 00:09:02,080
consolidation, if that's the case,
then stocks should be trending.
157
00:09:02,800 --> 00:09:03,070
Okay.
158
00:09:03,070 --> 00:09:03,850
Or vice versa.
159
00:09:04,090 --> 00:09:06,370
If stocks are in consolidation,
then commodities should be.
160
00:09:07,635 --> 00:09:09,405
Interest rates and currencies.
161
00:09:09,435 --> 00:09:11,655
One of those two should
be trending as well.
162
00:09:12,045 --> 00:09:12,345
Okay.
163
00:09:12,345 --> 00:09:16,095
So if we're going to divide it in
the end, the two special, special
164
00:09:16,095 --> 00:09:20,564
groups you want to group commodities
and stocks together, one of those
165
00:09:20,685 --> 00:09:24,735
must be in a trending environment
and currencies and interest rates.
166
00:09:24,855 --> 00:09:26,895
One of those two must be
in a training environment.
167
00:09:27,735 --> 00:09:28,095
Okay.
168
00:09:28,395 --> 00:09:30,135
So you have to have one of the two.
169
00:09:31,500 --> 00:09:32,640
Being in a training environment.
170
00:09:32,640 --> 00:09:37,469
And that helps really frame the models
that the algorithms will use to move price
171
00:09:37,469 --> 00:09:41,219
around, not just in foreign exchange, but
in all the other asset classes with the
172
00:09:41,219 --> 00:09:45,780
exception of commodities, which are really
focused in, on real supply to me, in fact,
173
00:09:51,045 --> 00:09:51,255
Okay.
174
00:09:51,255 --> 00:09:52,995
Intermarket analysis conferences.
175
00:09:53,625 --> 00:09:53,895
Okay.
176
00:09:54,195 --> 00:09:56,565
We talked about intermarket analysis.
177
00:09:56,565 --> 00:10:00,735
We've already taught how I look at
it and what things I look for, but
178
00:10:00,735 --> 00:10:04,455
I want to bring it up as a hallmark
here in not leading to death, but you
179
00:10:04,455 --> 00:10:07,875
already know how I look at intermarket
analysis because there was a specific
180
00:10:07,875 --> 00:10:09,375
teaching in January about it.
181
00:10:11,415 --> 00:10:12,975
The market as a whole.
182
00:10:13,035 --> 00:10:13,335
Okay.
183
00:10:13,335 --> 00:10:20,055
We look for specific inverse relationships
and positively correlated markets to
184
00:10:20,055 --> 00:10:24,405
suggest that if we're bullish on one
asset class or that one market in
185
00:10:24,405 --> 00:10:28,725
that asset class, is there supporting
ideas through the use of intermarket
186
00:10:28,725 --> 00:10:30,585
analysis to build a confluence?
187
00:10:30,615 --> 00:10:33,615
Is it supported in another
asset classes or other markets?
188
00:10:34,365 --> 00:10:34,545
Hmm.
189
00:10:35,385 --> 00:10:40,065
If we're going to be trading Forex,
if we're looking for the dollar index
190
00:10:40,065 --> 00:10:46,155
to be bullish, we would look for
commodities to be at levels of resistance.
191
00:10:46,665 --> 00:10:46,965
Okay.
192
00:10:46,965 --> 00:10:49,665
Or an ability to, to rally higher.
193
00:10:49,665 --> 00:10:51,735
Or if it does make a higher
high, it fails and goes low.
194
00:10:52,979 --> 00:10:56,490
Um, the commodities would be
moving lower very easily or
195
00:10:56,490 --> 00:10:59,000
trending lower in that environment
when a dollar would be bullshit.
196
00:10:59,010 --> 00:11:01,079
And then obviously it would
be said that opposite terms.
197
00:11:01,380 --> 00:11:06,599
If we're looking for a bear's dollar
commodities would be easily trading
198
00:11:06,599 --> 00:11:10,650
through their old highs and very
stubbornly going below their old lows.
199
00:11:10,680 --> 00:11:16,949
And they would be moving aggressively
higher with very little consolidation,
200
00:11:16,979 --> 00:11:19,229
more upside than they do anything else.
201
00:11:19,260 --> 00:11:20,459
And anything below an old low.
202
00:11:21,390 --> 00:11:25,620
When the dollar is weak for commodities,
if they take out an old low, many times,
203
00:11:25,620 --> 00:11:28,439
you can expect turtle soup scenarios in
that condition and it would rally higher.
204
00:11:28,770 --> 00:11:32,939
So that's, that's what we'd be looking for
for intermarket analysis in conferences.
205
00:11:33,329 --> 00:11:39,209
So if we have those ideas seen across many
sectors and commodities, not just, uh,
206
00:11:39,240 --> 00:11:41,100
the CRB index that's being indicated here.
207
00:11:41,895 --> 00:11:42,195
Yeah.
208
00:11:42,345 --> 00:11:47,535
Are the grain markets, if we're bullish on
the dollar, um, are we seeing soybeans and
209
00:11:47,535 --> 00:11:49,185
wheat and corn fail to make higher highs?
210
00:11:49,185 --> 00:11:51,645
So if they do make higher highs,
are they rejecting them quickly?
211
00:11:52,065 --> 00:11:55,005
And are they seeing their lows blown
out and are they trending lower?
212
00:11:55,185 --> 00:11:58,485
That's supportive of bullish dollar
and the reverse would be seen, you
213
00:11:58,485 --> 00:12:01,545
know, and looking for a weaker.
214
00:12:02,990 --> 00:12:08,569
We would see those commodities making
higher highs and very little resistance
215
00:12:08,569 --> 00:12:10,610
at all in strong support levels.
216
00:12:10,640 --> 00:12:13,939
And if Lowe's are taken out and
commodities while the dollar's weak
217
00:12:13,939 --> 00:12:18,260
or expected to be weak, those lows
and commodities would just be turtle
218
00:12:18,260 --> 00:12:20,810
soup, longs, whether it be a false
break below and a low, and then you
219
00:12:20,819 --> 00:12:22,130
see higher prices and commodities.
220
00:12:22,459 --> 00:12:25,819
If you see that you have confirmation
that the dollar is in fact strong
221
00:12:25,819 --> 00:12:29,089
or weak relative to those ideas,
if the dollar is strong in.
222
00:12:29,895 --> 00:12:33,375
Classifications then we can see
there's business in foreign currencies.
223
00:12:33,825 --> 00:12:39,285
And if the dollar is weaker, you
know, you pair that up with stronger
224
00:12:39,285 --> 00:12:42,825
foreign currency and it's goes
without saying that's how we use the
225
00:12:42,825 --> 00:12:44,535
conferences for intermarket analysis.
226
00:12:44,805 --> 00:12:49,005
So we look for training environments as
a whole, either stocks or commodities
227
00:12:49,065 --> 00:12:50,475
have to be in trending environments.
228
00:12:52,195 --> 00:12:52,915
And I'm sorry.
229
00:12:53,425 --> 00:12:59,215
Intermarket analysis suggests that we see
the reflection of training environments
230
00:12:59,275 --> 00:13:02,065
in currencies and interest rates as well.
231
00:13:02,065 --> 00:13:04,465
One of those two have to be
in a training environment.
232
00:13:04,885 --> 00:13:09,685
So between the two major asset classes,
we have to have at least two in a
233
00:13:09,685 --> 00:13:12,205
training environment to support the
idea that there's going to be an
234
00:13:12,205 --> 00:13:16,855
explosive high probability swing,
trade cot, hedging program alignment.
235
00:13:18,640 --> 00:13:23,410
What we look for in this is the last
12 months of the commitment of traders
236
00:13:23,410 --> 00:13:24,880
report held by the commercials.
237
00:13:25,750 --> 00:13:30,430
The commercials are the largest
producers or providers of a commodity,
238
00:13:31,060 --> 00:13:32,590
and they may manufacture it.
239
00:13:32,620 --> 00:13:33,760
They may grow it.
240
00:13:33,790 --> 00:13:39,160
They may offer it in terms of like
a currency, like a bank, uh, that's
241
00:13:39,160 --> 00:13:40,360
their commodity, if you will.
242
00:13:40,390 --> 00:13:43,600
So they make it available to
they're the storehouse of it.
243
00:13:44,415 --> 00:13:48,315
And I'd like to look back over the last
12 months because hedging is usually done
244
00:13:48,405 --> 00:13:53,055
over a plan using the last 12 months data.
245
00:13:53,385 --> 00:13:55,785
So what was pricing like last 12 months?
246
00:13:56,025 --> 00:14:01,635
What was the commodity price based on
real supply and demand factors last March?
247
00:14:02,625 --> 00:14:04,005
What was it last January?
248
00:14:04,005 --> 00:14:05,265
What was it last August?
249
00:14:05,265 --> 00:14:05,595
What was it?
250
00:14:05,595 --> 00:14:07,065
Last December.
251
00:14:07,395 --> 00:14:07,755
Okay.
252
00:14:07,755 --> 00:14:12,060
And by looking at a range of 12 months,
It gives them an idea on how they
253
00:14:12,060 --> 00:14:17,069
should hedge pricing because they use
the last, last 12 months to frame their
254
00:14:17,069 --> 00:14:21,209
expectation on what may be normal or
what would be reasonable to expect
255
00:14:21,569 --> 00:14:22,980
going forward for the next 12 months.
256
00:14:22,980 --> 00:14:27,240
So they use that for hedging
because of that many times,
257
00:14:27,240 --> 00:14:32,400
they're going to see long-term net
short positions in a commodity.
258
00:14:33,615 --> 00:14:35,745
Through the use of the
commitment treasury report.
259
00:14:35,954 --> 00:14:41,415
So by looking at their net position,
being heavily net loss and net short, for
260
00:14:41,415 --> 00:14:47,415
instance, if we're looking at a market
that has a long term, long net short
261
00:14:47,415 --> 00:14:50,505
position being held by the commercials
that would be seen with the red line
262
00:14:50,505 --> 00:14:55,665
here, in this example, you can see from
January, 2016, all the way to the present,
263
00:14:56,204 --> 00:14:57,975
they have been below the zero line.
264
00:14:59,265 --> 00:15:04,665
That in itself by standard definitions
and by way of, uh, teachings by
265
00:15:04,665 --> 00:15:07,365
Larry Williams, who did the majority
of the early work on commitment,
266
00:15:07,365 --> 00:15:08,805
shows, reports being made public.
267
00:15:09,705 --> 00:15:11,415
This would be deemed as bearish.
268
00:15:11,715 --> 00:15:14,535
And this was a frustration for me,
and I'm not going to rehash all that
269
00:15:14,535 --> 00:15:15,495
because of the teachings on this.
270
00:15:15,885 --> 00:15:17,925
But I like to look as a hallmark.
271
00:15:17,985 --> 00:15:22,005
I want to see are commercials buying
or are they selling in their hedging
272
00:15:22,005 --> 00:15:23,655
program right now, as I'm doing this.
273
00:15:24,449 --> 00:15:25,410
We're about to take the trade.
274
00:15:26,010 --> 00:15:30,240
And what I do is I frame the last 12
months and look at the highest highs
275
00:15:30,240 --> 00:15:33,240
and lowest, low, and divided in half.
276
00:15:33,240 --> 00:15:35,040
And then I have a new zero line.
277
00:15:35,100 --> 00:15:38,880
So I ignore the zero line on the
standard net treated physician
278
00:15:38,880 --> 00:15:40,319
chart that everybody has access to.
279
00:15:40,319 --> 00:15:41,939
You can find this on bar chart.com.
280
00:15:42,930 --> 00:15:44,069
The lesson number eight, Oxley.
281
00:15:44,069 --> 00:15:44,699
Do a walk through.
282
00:15:44,699 --> 00:15:46,380
You can actually see me
do this whole process.
283
00:15:49,020 --> 00:15:52,140
I define that new range in the last
12 months of the commercial activity.
284
00:15:52,530 --> 00:15:55,920
That's my net short or net long basis.
285
00:15:56,490 --> 00:16:02,100
The 50% mark of that range, January 16,
you can see that it's where the highest
286
00:16:02,400 --> 00:16:06,810
portion of their holdings, where that
at the time was still underneath the.
287
00:16:07,530 --> 00:16:08,550
Some zero line.
288
00:16:08,880 --> 00:16:12,660
So they would be either neutral
or bare slightly in January, 2016.
289
00:16:13,140 --> 00:16:17,460
And then in July of 2016, the red
line went as low as it shows there.
290
00:16:17,520 --> 00:16:18,360
And that's the range.
291
00:16:18,930 --> 00:16:24,390
They need to find that by a high
level, 11 divided in half, and that's
292
00:16:24,390 --> 00:16:28,440
going to be your new zero level
or, but bullish or bearish level.
293
00:16:29,010 --> 00:16:34,440
You can see in December of
2016, we went above that new.
294
00:16:35,355 --> 00:16:39,285
Adjusted or makeshift zero
line as I'm indicating here by
295
00:16:39,435 --> 00:16:40,665
looking at their hedging program.
296
00:16:41,025 --> 00:16:44,985
So they were buying again
aggressively in December.
297
00:16:45,885 --> 00:16:49,185
So if the, see, if we see this, even
though they're below the net sum
298
00:16:49,185 --> 00:16:54,525
zero line from a net trader chart
from everyone's perspective in the
299
00:16:54,525 --> 00:16:58,334
retail world, I see that as buying in
December, going into January and still
300
00:16:58,334 --> 00:16:59,985
presently now they're they're buying.
301
00:17:01,365 --> 00:17:02,655
So if we see this.
302
00:17:03,810 --> 00:17:07,140
And alignment with the expectation
that the market should be going
303
00:17:07,140 --> 00:17:08,190
in a training environment.
304
00:17:08,400 --> 00:17:11,910
And intermarket analysis suggests that
the market itself is going to go higher
305
00:17:12,329 --> 00:17:16,350
and other markets that are inversely
correlated to it are going to go lower.
306
00:17:16,890 --> 00:17:20,610
Uh, then we have the cot hedging program
in alignment stating that yes, the
307
00:17:20,610 --> 00:17:22,020
commercials are in fact, they're buying.
308
00:17:22,110 --> 00:17:25,440
So we can go into our next stage of
analysis, looking at open interest.
309
00:17:28,400 --> 00:17:34,100
If we see the market, when conditions were
bearish, if this is the environment, you
310
00:17:34,100 --> 00:17:39,050
would see where we're above that zero line
and the market's been trending lower end.
311
00:17:39,860 --> 00:17:41,660
We are seeing this.
312
00:17:42,080 --> 00:17:45,710
This would not be
supportive of a strong sell.
313
00:17:45,770 --> 00:17:48,560
This would be at odds with that idea.
314
00:17:48,590 --> 00:17:50,870
So you'd have to wait for that
red line to go back down below.
315
00:17:51,675 --> 00:17:55,665
That new zero basis line or that
heavy, thick black line I've created
316
00:17:55,705 --> 00:17:57,375
separating them green and the red line.
317
00:17:59,995 --> 00:18:00,115
Okay.
318
00:18:00,115 --> 00:18:00,895
Open interest.
319
00:18:01,045 --> 00:18:03,325
We're going to look at the
relationship of open interest
320
00:18:03,325 --> 00:18:05,695
because it shows us an x-ray view.
321
00:18:05,695 --> 00:18:08,305
If you will, of what the
smart money is doing.
322
00:18:08,485 --> 00:18:09,685
Now, open interest real quick.
323
00:18:09,715 --> 00:18:14,565
If we see a increase or reduction
of opening, And that's delineated
324
00:18:14,565 --> 00:18:15,615
by that purple line here.
325
00:18:15,675 --> 00:18:20,265
It's a cumulative line showing the
total open interests in any one market.
326
00:18:20,415 --> 00:18:22,605
And it's going to be only shown
through a commodity cause that's
327
00:18:22,605 --> 00:18:23,775
where you get this information from.
328
00:18:24,525 --> 00:18:28,215
If open interest declines 10 or
15% or more, that's indicative
329
00:18:28,245 --> 00:18:30,135
of commercial short covering.
330
00:18:30,675 --> 00:18:31,395
If there is a.
331
00:18:32,065 --> 00:18:35,515
Reduction of open interest that
shows their willingness to not want
332
00:18:35,515 --> 00:18:39,955
to offer liquidity or expect lower
prices because they think that prices
333
00:18:39,955 --> 00:18:41,425
are going to go higher significantly.
334
00:18:41,425 --> 00:18:44,365
Otherwise they would hold
onto their open positions.
335
00:18:44,545 --> 00:18:48,175
And they're having that short
position it's confirmed when you see
336
00:18:48,175 --> 00:18:50,875
the red line, which has commercials
in a net traded physician chart
337
00:18:51,295 --> 00:18:53,395
go higher towards the zero line.
338
00:18:53,755 --> 00:18:55,815
So that's a reduction of.
339
00:18:56,850 --> 00:19:01,290
Open interest and a confirmation that
they are reducing their short positions.
340
00:19:02,010 --> 00:19:05,490
Otherwise that red line would be
either staying flat or going lower.
341
00:19:05,790 --> 00:19:07,140
It's going up at the same time.
342
00:19:07,140 --> 00:19:11,100
That purple line drops down from
November through November into December.
343
00:19:11,100 --> 00:19:14,850
And there was a huge reduction
in open interest over 500,000
344
00:19:14,850 --> 00:19:18,120
contracts down to just five to 400.
345
00:19:18,960 --> 00:19:19,170
Okay.
346
00:19:19,170 --> 00:19:22,320
So there are over a hundred thousand
contracts taken off that were
347
00:19:22,320 --> 00:19:25,950
short, and you can see that that
reduction is seen with that increase
348
00:19:26,040 --> 00:19:27,750
or movement higher in the red line.
349
00:19:27,750 --> 00:19:31,950
But by the commercial traders, this
is confirmation that your trade would
350
00:19:31,950 --> 00:19:36,600
be a bullish scenario and explosive
price action should be expected.
351
00:19:37,560 --> 00:19:41,660
If we see an increase of open
interest, 10 to 15% or more at a time.
352
00:19:42,705 --> 00:19:46,335
The commercials increase
their net selling.
353
00:19:46,725 --> 00:19:46,935
Okay.
354
00:19:46,935 --> 00:19:48,014
Or the red line goes lower.
355
00:19:48,315 --> 00:19:49,395
That is bearish
356
00:19:53,754 --> 00:19:57,475
to see the open interest declining
here, November going into December
357
00:19:58,405 --> 00:20:02,425
at the same time that red line is
increasing in value, which is the.
358
00:20:03,390 --> 00:20:04,710
Reduction of short selling.
359
00:20:05,220 --> 00:20:08,220
So they don't have a heavy net
short position on, and at the same
360
00:20:08,220 --> 00:20:09,330
time we interest at the client.
361
00:20:09,390 --> 00:20:12,540
This is bullish because they're not trying
to hold onto a heavy, short position.
362
00:20:15,090 --> 00:20:15,240
Okay.
363
00:20:15,240 --> 00:20:16,500
Moving on seasonal tendencies.
364
00:20:16,530 --> 00:20:21,270
We want to find obviously times when we
take a swing trade, when the seasonal
365
00:20:21,270 --> 00:20:23,070
tendencies aren't aligned for a movement.
366
00:20:23,100 --> 00:20:27,390
So if we have our major market analysis,
suggesting that there's training profiles
367
00:20:27,540 --> 00:20:31,260
in two of the major categories, opening.
368
00:20:32,545 --> 00:20:33,505
Is declined.
369
00:20:33,835 --> 00:20:37,705
We have our hedging program suggesting
the commercials aren't buying intermarket
370
00:20:37,705 --> 00:20:40,825
analysis suggests that this market
is poised to go higher because other
371
00:20:41,455 --> 00:20:43,555
markets are suggesting the confirmation.
372
00:20:43,555 --> 00:20:44,305
That's the case.
373
00:20:44,785 --> 00:20:48,115
And we see a seasonal tendency
for the market to want to rally as
374
00:20:48,445 --> 00:20:52,045
indicated here December into January
and growing over to the next year.
375
00:20:52,045 --> 00:20:54,115
You can still see January
going into February.
376
00:20:54,445 --> 00:20:57,115
There's a strong tendency still
for this market to go higher.
377
00:20:57,805 --> 00:21:00,115
If that's the case, we ha we now have.
378
00:21:01,125 --> 00:21:04,725
Five things in our favor, suggesting
there's going to be an explosive price
379
00:21:04,725 --> 00:21:06,825
action in this particular market.
380
00:21:07,395 --> 00:21:10,785
And if we're suggesting it's going to
go higher, we know now that there's
381
00:21:10,785 --> 00:21:13,335
a strong degree of probability
that it's going to be explosive
382
00:21:13,335 --> 00:21:16,135
price move going higher prices.
383
00:21:16,135 --> 00:21:19,155
Some should move higher, not in small
ranges, but it should be explosive.
384
00:21:19,785 --> 00:21:21,705
And it shouldn't be able to
thoracic price action move.
385
00:21:24,505 --> 00:21:27,455
Now we're gonna talk about
volatility filters and about
386
00:21:27,465 --> 00:21:29,185
tele filter is simply a contract.
387
00:21:30,210 --> 00:21:33,420
Idea where price moves from a
large range down to a small range.
388
00:21:34,660 --> 00:21:35,310
It's universal.
389
00:21:35,310 --> 00:21:37,800
It can be applied to monthly, weekly,
daily, or any other timeframe.
390
00:21:37,800 --> 00:21:43,050
But if we look at the green candle as
a monthly candle and we see the next
391
00:21:43,050 --> 00:21:47,220
candle or next month's candle trade
down to a smaller range, we look at
392
00:21:47,220 --> 00:21:49,140
the body of the candle, not the Wix.
393
00:21:49,500 --> 00:21:49,830
Okay.
394
00:21:49,830 --> 00:21:53,640
So you can see that that smaller
secondary candle or the black candle,
395
00:21:53,640 --> 00:21:54,510
and it doesn't make a difference.
396
00:21:54,510 --> 00:21:56,700
If it's an up-close or down
close, that's not important.
397
00:21:57,495 --> 00:22:00,585
What we look for is the lower
high in the higher, low.
398
00:22:00,645 --> 00:22:06,705
This is called an inside candle
or inside bar conceptually,
399
00:22:06,705 --> 00:22:08,145
it's a volatility contraction.
400
00:22:08,205 --> 00:22:12,405
So that means there's a high probability
that the next candle or the next candle
401
00:22:12,405 --> 00:22:15,915
after it will be a large range candle.
402
00:22:16,165 --> 00:22:19,754
Especially if you have a condition
that's poised to go higher or lower.
403
00:22:20,115 --> 00:22:21,945
So if it's trading at a
level that would be offering.
404
00:22:22,919 --> 00:22:25,620
And we have all the factors that
we mentioned so far in alignment,
405
00:22:25,949 --> 00:22:27,870
suggesting that it's going to
be an explosive price move.
406
00:22:27,870 --> 00:22:29,879
And then we had the
direction picked as bullish.
407
00:22:30,570 --> 00:22:34,020
The next candle, or next month's
candle should be an explosive
408
00:22:34,110 --> 00:22:38,340
up candle or green candle, or if
not that one, the very next one.
409
00:22:38,340 --> 00:22:45,629
So it gives us a anticipatory
expectation for price to explode the
410
00:22:45,629 --> 00:22:48,689
upside, but it doesn't give you timing.
411
00:22:48,689 --> 00:22:51,110
It just gives you the stage
that yes, this is going to.
412
00:22:51,900 --> 00:22:54,570
Very likely have an explosive
price move to the upside.
413
00:22:56,880 --> 00:23:00,960
Now this can be seen as also the
smallest range in the last seven days.
414
00:23:02,250 --> 00:23:06,990
Uh, that's another, uh, filter you can
use, you can do also the last three days,
415
00:23:06,990 --> 00:23:08,490
the smallest range in the last three days.
416
00:23:08,880 --> 00:23:13,560
So I use the last three days, the last
seven days, and I use any inside a candle
417
00:23:13,560 --> 00:23:19,320
or inside bar to frame the context around
a trait that I have already seen coming.
418
00:23:19,620 --> 00:23:21,660
If I get this, this is really adds to it.
419
00:23:22,080 --> 00:23:23,700
It's like that little wind up of a spring.
420
00:23:23,700 --> 00:23:26,550
Again, that analogy I like to use,
and it's going to be let go, and
421
00:23:26,550 --> 00:23:27,840
there's going to be dynamic prices.
422
00:23:30,850 --> 00:23:31,930
Major news headlines.
423
00:23:32,200 --> 00:23:34,960
If I'm bullish on a, up your
market and say, we're looking at
424
00:23:34,960 --> 00:23:38,950
gold as an example, if we have
all these things lending well to.
425
00:23:39,855 --> 00:23:41,715
The notion that gold should be bullish.
426
00:23:42,165 --> 00:23:45,315
Uh, everything in, in, in the
cards is suggested higher prices.
427
00:23:45,885 --> 00:23:49,245
If I'm about to buy or I'm looking
to the buyer, I like to see headlines
428
00:23:49,245 --> 00:23:54,045
that show describing weakness or
justifying why price went down.
429
00:23:54,435 --> 00:23:56,595
Because if I see that I know
it's going to build in market
430
00:23:56,595 --> 00:23:58,115
sentiment for retail minded trader.
431
00:23:58,550 --> 00:24:01,460
When they see this, like the stuff they
don't want to buy gold, they think I'm
432
00:24:01,460 --> 00:24:04,940
going to sell gold because they think
that the news media or the talking
433
00:24:04,940 --> 00:24:07,370
heads or CNBC, they're smart people.
434
00:24:07,370 --> 00:24:08,930
Therefore they, they are traders.
435
00:24:09,169 --> 00:24:10,159
And that's not the case.
436
00:24:10,310 --> 00:24:11,629
If they were traders, they
know what they're doing.
437
00:24:11,629 --> 00:24:14,629
They wouldn't be on the anchor
position talking to us about
438
00:24:14,870 --> 00:24:16,159
why something already happened.
439
00:24:16,190 --> 00:24:18,350
They would be home trading
it live before the fact.
440
00:24:18,530 --> 00:24:20,480
So if we're also bearish on a.
441
00:24:21,210 --> 00:24:24,870
Particular commodity or,
or a pair or a market.
442
00:24:25,320 --> 00:24:29,160
If we were bearish and we see price trade
up until a level, we want to be short.
443
00:24:29,940 --> 00:24:33,750
Ideally you want to see news headlines
that are talking about how good it's
444
00:24:33,750 --> 00:24:37,140
been moving up or how it's hitting
all historic highs, or it's done
445
00:24:37,140 --> 00:24:41,370
something that looks underlying bullish
in the commentary that they put on.
446
00:24:42,495 --> 00:24:46,995
Uh, for futures, I subscribed to futures
magazine and they do every month they talk
447
00:24:46,995 --> 00:24:51,585
about a particular market or two, and they
say, how great this market's been moving
448
00:24:51,585 --> 00:24:53,055
or how bad something's been happening.
449
00:24:53,505 --> 00:24:56,565
Usually I think the catalyst that really
sets up a really nice swing trade.
450
00:24:56,625 --> 00:24:57,705
And if you can start seeing that.
451
00:24:58,725 --> 00:25:02,055
At a time when you on the internet,
just go through the major headlines, go
452
00:25:02,055 --> 00:25:09,015
like on MarketWatch or CNBC, anything to
has a lot of talking heads and a lot of
453
00:25:09,015 --> 00:25:10,425
audience members usually following it.
454
00:25:10,455 --> 00:25:14,955
If they start talking about a market, when
you're looking to be a bullish buyer and
455
00:25:14,955 --> 00:25:18,045
they're, and they're giving headlines that
are bearish or HMI, and it's like a loaded
456
00:25:18,045 --> 00:25:19,965
deal it's so it's so good to see that.
457
00:25:20,445 --> 00:25:22,815
And it's also diametrically
opposed to what you would expect
458
00:25:22,815 --> 00:25:26,295
to see retail sees this and they
don't want to trade gold long.
459
00:25:26,325 --> 00:25:26,925
They think it's going to.
460
00:25:27,705 --> 00:25:30,855
But we go in step right in front of
and say, okay, we're trading rate in
461
00:25:30,855 --> 00:25:35,805
there when the sentiment is most weak,
which brings us to market sentiment.
462
00:25:36,675 --> 00:25:40,245
I use a indicator for this,
and yes, you heard that, right?
463
00:25:40,245 --> 00:25:44,205
I use an indicator if the Williams
percent R into my opinion, it's
464
00:25:44,835 --> 00:25:48,195
the most accurate in terms of
an indicator for overall result.
465
00:25:48,555 --> 00:25:51,045
And what I do is I apply eight, 15 period.
466
00:25:51,645 --> 00:25:54,855
Uh, millions percent are
on a daily basis, and I do.
467
00:25:55,995 --> 00:25:57,795
A simple overbought oversold idea.
468
00:25:58,455 --> 00:26:05,175
And I divide it and use anything at the
50 level or below that is oversold and a
469
00:26:05,175 --> 00:26:10,695
buying area and everything above the 50
level is over bought or a selling area.
470
00:26:11,445 --> 00:26:15,225
And if we're at the 50 level and
we've left the oversold scenario,
471
00:26:15,285 --> 00:26:17,175
I will still factor a potential.
472
00:26:18,675 --> 00:26:22,695
And if we left an overbought condition
recently in traded down, hovering around
473
00:26:22,695 --> 00:26:28,665
the 50 level, I will favor the overbought
side to over the oversold condition.
474
00:26:28,665 --> 00:26:32,294
In other words, if we're at a
point of equilibrium or at the
475
00:26:32,294 --> 00:26:35,865
50 level, wherever we left most
recently, whether it be overbought
476
00:26:35,865 --> 00:26:37,304
oversold, I elect to go with that.
477
00:26:39,135 --> 00:26:39,685
And that's it.
478
00:26:39,865 --> 00:26:43,185
They're the hallmarks that I look
for for explosive swing trades.
479
00:26:43,185 --> 00:26:46,665
They actually will be referred to
again, later on in the mentorship,
480
00:26:46,695 --> 00:26:49,905
when we start talking about mega
trades, but I'm actually going to give
481
00:26:49,905 --> 00:26:54,435
you an outline, um, in lesson eight,
to incorporate some of these ideas.
482
00:26:54,735 --> 00:26:57,825
And also we're going to break down
the actual swing trading model, what
483
00:26:57,825 --> 00:27:03,005
we do from step one to execution
and management on the trade until
484
00:27:03,025 --> 00:27:04,425
next lesson, which could look good.
43167
Can't find what you're looking for?
Get subtitles in any language from opensubtitles.com, and translate them here.