Pocketman Futures Live LBR [16:17:50]> Good Afternoon [16:18:15]> getting sneak preview [16:18:23]> I want to start with the first chart [16:18:28]> [16:19:04]> I am going to go through some of my [16:19:14]> and talk about some of the fund buying that I look for on the close each day and how I set up my closing [16:19:32]> Some of the tools that I use, are a series of moving [16:19:33]> such as the 30 SMA of the high, the 30 SMA of the [16:19:52]>(sma is simple moving average), the 10 SMA of the [16:19:59]> and the 20 [16:20:04]> I like the 3/10 oscillator to watch momentum and the [16:20:10]> I use pattern [16:20:18]> volume, and market [16:20:24]> those are my main tools.

@Pocketman [16:20:48]> The first thing that we are looking at here is a basic 400 tick chart (this is CQG). I use a 400 tick with a 3200 tick when I trade. The area at the top here is a setup of a retest of a spike. The slope of the 10 period simple moving average turns down there( changes to a red color) there is also a sell div on the 3/10 oscillator and a break below the 30 low SMA is the trigger. The 30 low SMA is the thin red line. Once I have a Sell below the 30 SMA of the lows, my stop is placed two ticks above the high of the 30-period SMA of the high. At the bottom where if the slope turns up, I will get out of my short however, I like to wait for a violation of that 30 SMA of the highs before looking at the long side for a buy signal.

This is a chart that shows a basic head and shoulders. Below the neckline you can see there was also a sell on my 30 SMA low moving average. The slope of the 10 SMA is pointing down as well. A pocket violation was another signal.( I will elaborate on pockets later). When the trade was over we hit the measured objective and the slope of the 10SMA turn up after bouncing off the breakout pocket, where the trend initially started. We also had buy divergences on the 3/10 oscillator. I like to have conformation on all four indexes for a major sell at least 3 out of 4! The next slide shows an example of all indexes confirming at the same time on a H & S breakout...\Desktop\Screen New\scr-5 new.png

In this case there is a H and S pattern across all of these indexes..\Desktop\Screen New\scr-4 new.pngNew\scr-4 new.png

There are many unique ways of looking at volume or market data distribution. We will analyze the different tools that I use to determine my decisions. You can see that I have the same 30 SMA of the highs and lows on this chart (CQG) and the 10 SMA of the close which is colored green or red according to the slope. On this chart we have a coil which is price overlap or sideways distribution and a value to where the market is comfortable trading at that time. Where I have the “V's” shown those are small pockets. Let me touch on pockets here. Pockets tend to have a nice V shape to them. They are formed in an area where the market was rejected and reversed in the opposite direction. Usually these areas have good reason for the reversal therefore a retest of the Pocket would be hard to break. Pockets can often be a place to look for support or resistance for an entry or exit. A pocket catches your change until you put a hole in! The next chart I will go over more Pockets again...\Desktop\Screen New\chat 25.png

Often Pockets tend to fit in to each other in a trending market. In this example you can see how they fit together on the way down. P3 retested and fit into P1. P5 fit into P3.P6 barely made it into P5 showing weakness and breaking a double Pocket or bottom to start an accelerated move down. Then a series of pockets began to form a coil until there was a further violation of the Pockets and then rotating out of the coil. There are many other ways to spot a coil as we all know that a low ADX will help you also identify that too...\Desktop\Screen New\chat 20.png

This chart is an example of a trade at the end of the day a- 2:30 (CST)3:00(ET). This was where I called a trade in the room based on spotting the institutional buying of funds. Let me take a few minutes and explain this reason for the last half hour move that you sometimes will see me call. When I was on the trading floor I did execution for various long and short SP funds like the Rydex institutional funds. They do their buying after 2:30 (CST) (or selling ) as well as other funds do to shore up there positions. They use the futures to hedge and have usually have a 3:00(CT)4;00(ET) price mark to meet for the customer. Based on the way to know if the funds are coming in besides watching the volume is to understand how the orders are being generated in a fund. If there is a big up day and we stayed above the opening range for over 75% of the time, there is a high probability there would be big funds coming in the last half hour. Orders will come in all day until the last half hour. These funds will figure how many contracts need to be entered to hedge this position. There are some fake outs right before the last half hour so be careful. I need a technical reason to get in first and then I watch the volume to see if it is growing in the right direction.. There are many ways I watch the volume and data. I will show you 4 more examples of the same day and time using PhotonTrader. This is Example 1. Exchange

Example 2. This is using Pockets, trend lines and moving averages to pick the breakout before looking at volume. Exchange

Example 3. This example shows the volume at each price on every five minute bar using my PhotonTrader chart. The yellow numbers represent the highest volume on that bar and the white numbers are the lowest volume. You can see the rotation of volume this way...\Desktop\Screen New\Chat 1.png

Example 4. This is just a 5 minute bar with volume profiles next to it so you get a better visual picture of the same trade...\Desktop\Screen New\Chat 2.png

Example 5. Here is the way the same breakout using Market Profile. This is a PhotonTrader Market Profile chart expanded out profile next to the regular MP. Along the side and bottom you can see volume bars. This gives me a better idea of what is happening to the volume and data as we rotate out of the value area. So there are five examples how I identify my end of the day call. These charts always come in handy all day long to see when new highs and lows are being made if there is potential to follow through or not by watching the volume, momentum, rotation of value and tails...\Desktop\Screen New\chat 3.png

This Example is a snap shot of my PhotonTrader chart and execution setup. In this slide I got long when we made new highs out of a coil with volume confirming. It was the middle of the day so you need to be careful of volume and momentum...\Desktop\Screen New\chat 7.png

The next 4 slide examples A-D show another end of the day trade. When I called this trade in the room it was a buy the last half hour 2:30CT/3:30ET and we are exit was at 3;00(CT)4:00(ET).I wanted to give you an other Example of late day fund buying. This day we were up all day. We broke out of a ascending triangle or coil to the upside followed with volume. Volume increased all the way as funds lifted the offers. Example (A)..\Desktop\Screen New\chat 16.png

Example (B) Here you can see the breakout at starting at 2:30CT/3:00ET. I’m using PhotonTrader with a 5 min volume at price here to watch the volume build. I also have my time and sales filter set to see 50 contracts and higher. I have set to show 2 seconds and then it will refresh the window. I will go over this filter later...\Desktop\Screen New\chat 9.png

Example (C) You can see as the trade progresses higher it is backed by volume. This kind of volume can only be supported with the help of institutional or fund buying. We rallied to by 3:00CT/4:00ET. That is usually the end of the push and when they stop...\Desktop\Screen New\chat 14.png

Example (D) This is the same trade using the PhotonTrader Market Profile chart expanded out with volume. Noticed volume dried up at 3:00CT/4:00ET. The high was in and the pressure was off ( the Party was over)...\Desktop\Screen New\chat 15.png

This is an example of the market depth and time/sales filter on PhotonTrader that I use. On the top you see the regular market depth that shows the bids on the right and the offers on the left. Below is a feature I designed so that I can see what is actually trading. I can filter to a contract size that I feel would be big enough to make a difference in the market direction. I set my filter on 50 contracts or higher. It will show trades taking place on the bid or the offer that exceed 50 contracts. If it is red in this case all those trades were real trades on the offer which would tell me the market should trade up to the next price. When I was on the CME floor and in the SP pit trading if we were making new highs and I can hear myself biding I knew I was wrong. So lets say we were making new highs and the market filter didn’t show much buying on the offer we can assume there might be a buying tail soon to follow. Now lets take the other scenario (like the example below) if we were making new highs and there was substantial size buying of the offers you can expect expansion of those highs. Another words if you go to a party and you show up and no one is there the PARTY IS OVER. These slides are just some of the tools I use along with all of the LBR tools and technical's that I follow. If you have any questions you can private me on the Chat or send me an at Good Luck with you trading!