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YM1! trade ideas

Elliott Wave Analysis Expects Dow Futures (YM) to Pullback in WaShort Term Elliott Wave in Dow Futures (YM) suggests rally from 4.19.2024 low is unfolding as a 5 waves impulse Elliott Wave structure. Up from 4.19.2024 low, wave ((i)) ended at 38801 and pullback in wave ((ii)) ended at 37866. Index extends higher again in wave ((iii)) with internal subdivision as an impulse in lesser degree. The 1 hour chart below shows the subdivision of wave ((iii)). Up from wave ((ii)), wave i ended at 38527 and dips in wave ii ended at 38037. Index then extended higher in wave iii towards 39127 and pullback in wave iv ended at 38936. Final leg wave v ended at 39781 which completed wave (i). Index then pullback in wave (ii) towards 39405 and extended higher in wave (iii) towards 40191. Wave (iv) pullback ended at 39955. Final leg wave (v) ended at 40213 which completed wave ((iii)) in higher degree. Expect wave ((iv)) pullback to unfold in 3 swing before Index resumes higher in wave ((v)). Near term, as far as pivot at 37847 low stays intact, expect dips to find support in 3, 7, 11 swing for further upside.
CBOT_MINI:YM1!
by Elliottwave-Forecast
Dow Jones Weekly ATR EstimationsGoing through the weekly chart for the averages of how far Dow Jones can move in a week. The last 84 weeks averaged out to 937 ticks. This lines up with the medium sized candles. There are three types of weekly candles 1. Small Doji candle (28 occurrences) 2. Medium sized candle (47 occurrences) 3. Large expansion candle (9 occurrences) This small set of data sampled tells me that the vast majority of weekly candles have a medium sized move between 700-1200 ticks with the average of all 84 weeks being 937 ticks. Large sized expansion candles are rare with only 9 weekly candles exceeding 1400+ ticks Small doji style candles are also fairly common with 28 weeks being between 350-550 ticks Now that I know this information, the question is how to use it effectively in Live Time.
CBOT_MINI:YM1!
by Dow_Jones_Maestro
Trapped traders provides a great Short opportunity on DOW The plan for the session was to trade short off resistance on the DOW after an initial opening drive higher. The short side was the play and paid out nicely for patient sellers. In the video I talk through the key Price Action for the move and prime trade areas on the DOW Index. ANY QUESTIONS, JUST LEAVE IN THE COMMENTS !! ** If you like the content then take a look at the profile to get more ideas and learning material ** ** Any Comments and likes are greatly appreciated **
CBOT_MINI:YM1!Education
by TradeTheStructure
4
Break Down a Trading Session and Price Action Taking NotesIn the short video I show the price action from a session on the DOW JONES and the key price action that I see important for my daytrading. This is a process I do each day to improve my trading and it helps to solidify in my mind what I want to see in the setups. You will have to pause the video to read the notes but please enjoy. ANY QUESTIONS, JUST LEAVE IN THE COMMENTS !! ** If you like the content then take a look at the profile to get more ideas and learning material ** ** Any Comments and likes are greatly appreciated **
CBOT_MINI:YM1!
by TradeTheStructure
Week of May 12 - AAPL/BTC/DJI/VIX/10yr Last week we had record low volume on indexes as they drifted higher. There as a drought of news to move the market - and the volume was reminiscent of a holiday week. Indexes The DJI went vertical to fill the last weekly imbalance we had that was MOST in the premium of the swing. From HERE - we are at a major deciding point. The weekly chart still is bearish and we need to confirm this was just our back-test. CBOT_MINI:YM1! needs to respect this weekly FVG and starting heading lower confirming this as our "lower high". Wicks above and outside the weekly FVG are permitted - but notice how they closed the weekly candle INSIDE the FVG - this means that the FVG is still being respected. IF we can get confirmation of this being the lower high as set - the next logical targets are the April Lows/LOY. The scam-ridden CME_MINI:NQ1! didn't do much this week but flop around inside a 2% range. I have no clear weekly bias on Nasdaq so I can't really comment too much on it. The best thing I can see is that NASDAQ:AAPL is holding up here, but its ready to drop lower into the gap that was created. Once that happens, the market will go with it. So far, its just a series of lower lows and lower highs. Sectors One thing I want to touch on - is where we are in the cycle. The way we can identify this, is that we can look at typical "late cycle" charts on Energy/Materials/Metals and compare them to the SPX. When you see these sectors rallying - its typically near/at the market tops. Here is chart of $XLB/$XLI/$XLE/$XLP/ When you see Materials/Industrials/Energy/Staples all running up like this - it means that money is moving from things like tech and communication services - and into "safer" sectors. Bitcoin One of my favorite things to look at for a risk-apatite gauge is Bitcoin. Weekly BTC is down by 17%. IF it doesn't bounce from down here and soon - a new bear market will begin. This week will give us CPI/PCE reports mid week that will be the key driver for the next market move. VIX Another concerning thing for bulls is the fact that the VIX is now near its yearly lows, and indexes aren't making ATH. Again - This all smells super trappy as the market is setting up for the move during the mid-week inflation report releases. Interest Rates Rates are rolling over. The 10year continued its march lower this week and is now respecting bearish FVGs which is what we want to see. Half the reason that markets were able to drift higher this past week was due to the rates market being stable. This Bond trade is a longer term swing as I think that rates will crater during the coming recession. So far - the 2/10 spread remains inverted for 2 years now. This is a RECORD duration and depth of yield curve inversion. This spread has a 100% accuracy rate when it comes to predicting recessions. Note the dates in the vertical white bars - once the 2s/10s un-invert - we have a recession 100% of the time. So here is the setup I am watching for this week; We saw YM pop into our MOST premium weekly IRL level - from here I will be looking for 4hr charts to displace lower and start the march towards nLOY. Looking for interest rates to continue to march lower - this will be bullish for indexes (at first) as indexes tend to ignore WHY rates are dropping for a little while. BTC needs to make a stand here - or its going to enter another bear market. Until next week - We'll be watching.
CBOT_MINI:YMM2024Short
by Baero-Trading
Week of May 5 - DXY/Oil/DJI/NDX/VIX/10yrWhat a WILD week we had! Last week was insanely noisy between the FOMC on Wed, NASDAQ:AAPL earnings on Thursday, and NFP on Friday. This coming week of May 5th offers very little in the way of news catalysts, so it will be great for us TA based traders. So far, all of our weekly objectives have been playing out - and nothing has really changed from my perch here. I am still looking for new lows to come on indexes, but we will get into that later in this thread. The Powell pump candle was reversed completely by the cash close last Wednesday. Thursday night, NASDAQ:AAPL admitted they have slowing sales in China, but its (not as ad as feared) - so they gapped it up 4%. And on Friday - the market rallied on weak job numbers as the job market is softer than expected. Seems legit. CBOT_MINI:YM1! - The Dow behaved REALLY clean this week. You'll notice that all we did, was sweep LAST weeks lows, and return back to the IRL/FVG to reload more shorts. From HERE, I am looking for a weekly IRL to ERL move - with a final objective of LOY. From there we can wait and see where the next ERL to IRL move is. May started last week, so we had a fresh monthly candle that initially had a FVG forming. This index pop over the past 2 days has now filled the monthly chart. Everything on CBOT_MINI:YM1! is really clean here and aligned. We have the monthly that has filled it's monthly FVG, the weekly ran last weeks lows and has returned to IRL (in PREMIUM) to reload for shorts, and the h4 is running up into its 200sma. Looking over at the scammy CME_MINI:NQ1! - its the same setup on the weekly. The Monthly candle filled a FVG that was forming, the weekly returned to a IRL in Premium, and the h4 is running into a 200sma. If you average NQ and YM together- you get SPX. The difference is that they will hold YM steady while the sell NQ - and then rotate. It's really interesting to watch but the net effect of it is that the damage and move done to SPX is minimized this way. When you get a setup like we are seeing here - where both NQ and YM are aligned for sell programs - headed into a quiet week with no news - danger! This just Smells like a strong smell setup to me. Lets talk NASDAQ:AAPL for a minute. ALL they did - was run this thing up into the LAST open gap from Feb. The MegaCap tech stocks are SO large that they tend to behave pretty cleanly with respect to gap fills and the like. To ME - this is a massive bull trap - I have 0% interest in chasing this thing VIX - Now that we have talked about how the indexes are primed for a sell program IMO - lets look at the VIX for any clues we can glean. I will cover the weekly VIX in the next section, but VIX is now filling it's gap it created from a month ago. This is supportive of markets - until it isn't. I am looking for Monday to have a slight pop in markets as the VIX fills its gap - and then they start selling indexes things with vigor Tue-Thur. DXY/10yr/VIX - DXY Pulled back last week - but I still am looking for higher prices on the weekly objective to ~ 107 I am looking for rates to start to ease here as the economy weakens. I have an oversized bond long position on as I think this is the most asymmetric trade in the market currently. Bonds are starting to smell the weakening economy and are moving towards lower rates - the last missing piece is the 2s/10s inversion. This has been the largest and deepest yield inversion - in the history of markets - and it is NOT bullish. If history is any guide, once the 2/10s spread de-inverts - we typically see market crashes (note the dates in red) Oil - WTI got its head kicked in last week, and we are a pivotal level here. If Oil keeps crashing - it is just ANOTHER indicator of the weak economy. I honestly dont have any weekly context on oil at the moment - but the h4 chart shows us running right into the 200sma. The scary part about the weekly chart is how we have displaced lower. Next week will be a big deal to see how we backtest and confirm the breaker lower. Oil could head down to the lower 70s before we can see any appreciable bounce. So here is the setup I am watching for this week; We saw YM pop into our weekly IRL level - from here I will be looking for 4hr charts to displace lower and start the march towards nLOY. Looking for interest rates to continue to march lower - this will be bullish for indexes (at first) as indexes tend to ignore WHY rates are dropping for a little while. Oil MUST make a stand here - and soon. Otherwise I see us trading back into the 70s for monthly levels. Until next week - We'll be watching.
CBOT_MINI:YMM2024Short
by Baero-Trading
10
Elliott Wave Analysis on Dow Futures (YM) Favors UpsideShort Term Elliott Wave View in Dow Futures (YM) suggests the Index ended wave (4) correction at 37473. The Index has now turned higher in wave (5). However, it still needs to break above the previous wave (3) peak on 4.1.2024 at 40358 to rule out a double correction. Up from wave (4), wave ((i)) ended at 38451 and pullback in wave ((ii)) ended at 382808. Wave ((iii)) ended at 38682, dips in wave ((iv)) ended at 38428, and final wave ((v)) higher ended at 38801. This completed wave 1 in higher degree. Pullback in wave 2 unfolded as a zigzag Elliott Wave structure. Down from wave 1, wave ((a)) ended at 37944 and wave ((b)) rally ended at 38592. Wave ((c)) lower ended at 37866 which completed wave 2 in higher degree. The Index has turned higher again in wave 3 of (5). Up from wave 2, wave (i) ended at 38527 and pullback in wave (ii) ended at 38037. Wave (iii) higher ended at 38958 and dips in wave (iv) ended at 38661. Near term, as far as pivot at 37473 low stays intact, expect pullback to find support in 3, 7, or 11 swing for further upside.
CBOT_MINI:YM1!
by Elliottwave-Forecast
Options Blueprint Series: Ratio Spreads for the Advanced TraderIntroduction to Ratio Spreads on E-mini Dow Jones Futures In the dynamic world of options trading, Ratio Spreads stand out as a sophisticated strategy designed for traders looking to leverage market nuances to their advantage. Regular options on the E-mini Dow Jones Futures are a popular choice (YM). Defining the E-mini Dow Jones (YM) Futures Contract Before delving into the specifics of Ratio Spreads, understanding the underlying contract on which these options are based is crucial. The E-mini Dow Jones Futures, symbol YM, offers traders exposure to the 30 blue-chip companies of the Dow Jones Industrial Average in a smaller, more accessible format. Each YM contract represents $5 per index point. Key Contract Specifications: Point Value: $5 per point of the Dow Jones Industrial Average. Trading Hours: Sunday - Friday, 6:00 PM - 5:00 PM (Next day) ET with a trading halt from 5:00 PM - 6:00 PM ET daily. Margins: Varied based on broker but generally lower than the full-sized contracts, providing a cost-effective entry for various trading strategies. CME Group suggests $8,400 per contract at the time of this publication. Ratio Spread Margins: Often require a careful calculation as they involve multiple positions. Traders must consult with their brokers to understand the specific margin requirements for entering into ratio spreads using YM futures. Margins for Ratio Spreads are often equal to the margin requirement when trading the outright futures contract. Understanding Ratio Spreads Ratio Spreads involve buying and selling different amounts of options at varying strike prices, but within the same expiration period. This strategy is typically employed to exploit expected directional moves or stability in the underlying asset, with an additional emphasis on benefiting from time decay. Types of Ratio Spreads: Call Ratio Spread: Involves buying calls at a lower strike price and selling a greater number of calls at a higher strike price. This setup is generally used in mildly bullish scenarios. Put Ratio Spread: Consists of buying puts at a higher strike price and selling more puts at a lower strike price, suitable for mildly bearish market conditions. Mechanics: Execution: Traders initiate these spreads by first determining their view on the market direction. For a bullish outlook, a call ratio spread is suitable; for a bearish view, a put ratio spread would be applicable. Objective: The primary goal is to benefit from the premium decay of the short positions outweighing the cost of the long positions. This is enhanced if the market moves slowly towards the strike price of the short options or remains at a standstill. Risk Management: It's crucial to manage risks as these spreads can lead to limited losses if the market moves against the trader, or surprisingly to many, to unlimited losses if the market moves sharply in the desired direction. Proper stop-loss settings, adjustments and continual market analysis are imperative. Focused Strategy: Bullish Call Ratio Spread In the context of the E-mini Dow Jones, considering the current upward trend with potential slow advancement due to overhead UFO (UnFilled Orders) Resistances, a Bullish Call Ratio Spread can be particularly effective. This strategy allows traders to capitalize on the gradual upward movement while keeping a lid on risks associated with faster, unexpected spikes. Strategy Setup: Selecting Strikes: Choose a lower strike where the long calls are bought and a higher strike where more calls are sold. The selection depends on the resistance levels indicated by the UFOs. Position Sizing: Typically, the number of calls sold is higher than those bought, maintaining a ratio that aligns with the trader's risk tolerance and market outlook. Market Conditions: Best implemented when expecting a gradual increase in the market, allowing time decay to erode the value of the short call positions advantageously. Real-time Market Example: Bullish Call Ratio Spread on E-mini Dow Jones Futures Given the current market scenario where the Dow Jones Index is experiencing a bullish breakout, it’s crucial to align our options trading strategy to take advantage of potential slow upward movements signaled by overhead UFO Resistances. This setup suggests a favorable environment for a Bullish Call Ratio Spread, aiming to maximize the benefits of time decay while managing risk exposure effectively. Setting Up the Bullish Call Ratio Spread: 1. Selection of Strike Prices: Long Calls: Choose a strike price near the current market level (Strike = 39000). Short Calls: Set the higher strike prices right at or above the identified UFO Resistances (Strike = 41000). The rationale here is that these levels are expected to cap the upward movement, thus enhancing the likelihood that these short calls expire worthless or decrease in value, maximizing the time decay benefit. 2. Ratio of Calls: Opt for a ratio that reflects confidence in the bullish movement but also cushions against an unexpected rally. A common setup might be 1 long call for every 2 short calls. Execution: Trade Entry: Enter the trade when you observe a confirmed break above a minor resistance or a pullback that respects the upward trend structure. Monitoring: Regularly monitor the price action as it approaches the UFO Resistances. Adjust the position if the market shows signs of either stalling or breaking through these levels more robustly than anticipated. Trade Management: Adjustments: If the market advances towards the higher strike more quickly than expected, consider buying back some short calls to reduce exposure. Risk Control: Implement stop-loss orders to mitigate potential losses should the market move sharply against the position. This could be set at a level where the market structure changes from bullish to bearish. This real-time scenario provides a practical example of how advanced traders can utilize Bullish Call Ratio Spreads to navigate complex market dynamics effectively, leveraging both market sentiment and technical resistance points to structure a potentially profitable trade setup. Advantages of Ratio Spreads in Options Trading Ratio Spreads offer a strategic advantage in options trading by balancing the potential for profit with a controlled risk management approach. Here are some key benefits of incorporating Ratio Spreads into your trading arsenal: 1. Maximizing Time Decay Optimized Premium Decay: By selling more options than are bought, traders can capitalize on the accelerated decay of the premium of short positions. This is particularly advantageous in markets exhibiting slow to moderate price movements, as expected with the current Dow Jones trend influenced by UFO resistances. 2. Cost Efficiency Reduced Net Cost: The cost of purchasing options is offset by the income received from selling options, reducing the net cost of entering the trade. This can provide a more affordable way to leverage significant market positions without a substantial upfront investment. The Net Debit paid is 403.4 (690 – 143.3 – 143.3) = $2,017 since each YM point is worth $5. Note: We are using the CME Group Options Calculator in order to generate fair value prices and Greeks for any options on futures contracts. 3. Profit in Multiple Market Conditions Versatile Profit Scenarios: Depending on the setup, Ratio Spreads can be profitable in a stagnant, slightly bullish, or slightly bearish market. The key is the strategic selection of strike prices relative to expected market behavior, enabling profits through slight directional moves while protected against losses from significant adverse moves. 4. Flexible Adjustments Scalability and Reversibility: Given their structure, Ratio Spreads allow for easy scaling or reversing positions depending on market movements and trader outlook. This flexibility can be a critical factor in dynamic markets where adjustments need to be swift and cost-effective. Risk Management in Ratio Spreads While Ratio Spreads offer several benefits, they are not without risks, particularly from significant market moves that can lead to potentially unlimited losses. Here’s how to manage those risks: Stop-Loss Orders: Setting stop-losses at predetermined levels can help traders exit positions that move against them, preventing larger losses. Position Monitoring: Regular monitoring and analysis are crucial, especially as the market approaches or reaches the strike price of the short options. Adjustments: Being proactive about adjusting the spread, either by buying back short options or by rolling the positions to different strikes or expiries, can help manage risk and lock in profits. Conclusion Ratio Spreads, particularly in the format of Bullish Call Ratio Spreads demonstrated with E-mini Dow Jones Futures, offer a sophisticated strategy that balances potential profit with manageable risks. This approach is suited for traders who have a nuanced understanding of market dynamics and can navigate the complexities of options with strategic finesse. When charting futures, the data provided could be delayed. Traders working with the ticker symbols discussed in this idea may prefer to use CME Group real-time data plan on TradingView: www.tradingview.com This consideration is particularly important for shorter-term traders, whereas it may be less critical for those focused on longer-term trading strategies. General Disclaimer: The trade ideas presented herein are solely for illustrative purposes forming a part of a case study intended to demonstrate key principles in risk management within the context of the specific market scenarios discussed. These ideas are not to be interpreted as investment recommendations or financial advice. They do not endorse or promote any specific trading strategies, financial products, or services. The information provided is based on data believed to be reliable; however, its accuracy or completeness cannot be guaranteed. Trading in financial markets involves risks, including the potential loss of principal. Each individual should conduct their own research and consult with professional financial advisors before making any investment decisions. The author or publisher of this content bears no responsibility for any actions taken based on the information provided or for any resultant financial or other losses.
CBOT_MINI:YM1!Education
by traddictiv