2024-12-17 06:00:01

Final Fed Week LIVE with Derrick Oldensmith: Market Strategies and Key Insights

As financial professionals and curious investors tuned into the recent Final Fed Week LIVE, Derrick Oldensmith, a seasoned prop trader from T3 Trading Group, provided deep insights into current market dynamics, trading strategies, and his expectations about the upcoming federal movements. Hosted by Greta Wall, this session not only offered a glimpse into Oldensmith’s trading strategies but also shed light on broader market trends valuable for investors strategizing their year-end positions.

Derrick Oldensmith’s Market Check-In

Current Positions and Trading Behavior

Oldensmith began the session by disclosing his current trading positions, emphasizing transparency in line with his professional trading responsibilities at T3 Trading Group. Such disclosures offer an educational peek into a professional trader’s portfolio, highlighting strategies in dealing with market volatility.

Performance and Strategical Moves

One of the highlights of Oldensmith’s discourses was the detailed breakdown of his trading day, particularly focusing on his positions in Tesla and Paler. He explained his tactical approach to shorting Tesla amidst its uptrend, illustrating the counterintuitive strategies professional traders might adopt to capitalize on market inefficiencies and emotional trading behaviors in the market.

Substantial Risks and Rewards

Oldensmith’s conversation on Tesla emphasized how professional traders manage risk and adapt strategies in real-time. His discussion about managing a significant short position and the psychological resilience required in trading underscores the often-underappreciated complexity behind trading decisions.

Rationale Behind Trades

Delving into specific stocks, Oldensmith discussed his recent trades with Paler, acknowledging its addition to the NASDAQ and its consequent market behaviors. His strategy—betting on a ‘sell the news’ event—reveals a calculated approach to trading stocks that are subject to broad market speculations and movements due to external developments.

Market Trends and Future Expectations

Insight Into Federal Rate Decisions

The forthcoming federal rate cut was a major point of discussion. Oldensmith expressed his expectation of a rate cut, which had been largely anticipated by the market. More importantly, he highlighted the potential implications of the Fed’s future decisions on market dynamics, pointing towards a possible cautious stance from the Fed as 2025 approaches.

Predictive Analysis for 2025

Oldensmith’s predictive commentary about the market’s direction moving into 2025 reflects a consensus expectation of continued bullish trends, tempered by strategic caution due to external economic indicators and shifts in federal policy. This balance between optimism and caution in his forecast could guide investors in planning their strategies for the coming year.

Technical Analysis and Strategy Adjustments

A significant portion of the webinar involved Oldensmith’s technical analysis of market movements and his adjustments in trading strategies in response to those insights. His detailed explanation of the use of moving averages, EMA (Exponential Moving Average), and other technical indicators in assessing stock positions like Tesla offered a practical lesson in technical trading methodologies.

Educational Takeaways for Emerging Traders

Throughout the webinar, Oldensmith provided multiple nuggets of wisdom on trading psychology, market analysis, and the importance of adapting to prevailing market conditions. His candid discussion about the challenges and tactical maneuvers in the trading landscape serves as an invaluable resource for both novice and experienced traders aiming to refine their own trading strategies.

Leveraging Professional Trading Techniques

For those intrigued by the mechanics of professional trading, Oldensmith’s insights into leveraging positions, reading market indicators, and strategic decision-making processes are particularly beneficial. These elements underscore the webinar’s value not just as a market update, but as a comprehensive educational tool for trading professionals.

Final Thoughts on Market Adaptability and Strategy

Closing the session, Oldensmith reiterated the importance of adaptability in trading. In a constantly fluctuating market, the ability to adjust strategies, anticipate market reactions to economic events, and manage psychological pressures stands as the cornerstone of successful trading.

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As we look toward the intricacies of market trends and federal adjustments in 2025, it is clear from this session that ongoing education, strategic flexibility, and a robust understanding of market fundamentals are essential for anyone looking to navigate the complexities of financial trading successfully.

Watch this video below for the full details:

2024-12-17 06:00:01
Visit https://t3live.com/dolive to get Derrick’s free prop trading ebook.

Derrick discusses:

-This week’s Fed decision
-Year end expectations
-His favorite current setups
-And more

Get Derrick’s free prop trading ebook: https://t3live.com/dolive

Video transcript:
all right hello hello everyone happy Monday and welcome to today’s weekly Market check-in with myself Greta wall I’m your host and I’m joined by Derek Olden Smith the leader of T3 Liv’s protes virtual trading floor and a professional prop Trader with T3 Trading Group uh before we get into our disc discussion today let’s quickly take a look uh this is the current positions Derek is holding as of 12:30 p.m. eastern time today again he is a professional prop Trader with T3 Trading Group so for disclosure purposes this is what he’s currently trading okay M okay Derek happy Monday how is your day going so far uh it’s been a really wild one um I’m up some money so far so good I did really really well with paler short uh I got some other things that are not quite as good I I I just a little bit before we started chatting took like a pretty big Tesla short which I’m going to be keeping tight uh see if I can get this thing to roll through this like 455 4 456 area I might be able to get a bigger pullback on that I’m I’m long mstr today you know I I I I came out to Idaho and I got real crazy and went long micro strategy uh who would have thought um usually you know not my cup of tea that stock but uh you know money’s money and the techn CH pattern looks good so all is well on on my end all right good stuff uh all right paler you had a good short uh I know paler has been a struggle for you in the past uh was it like month you were really battling the stock short uh you had you know a a thought about fraud and all that with the stock so talk about uh your most recent short end the success you’ve seen and how you managed uh are you out of that original position where you were really battling it or how are things going there uh so I I did really really well with with paler into that I think we spoke about it last week that like really big day three Gap up where we we shorted big up here very early pre-market I think I was shorting even above the high of the day on that did really well with it got a pretty big pullback off that which was nice but I was never able to get a close below this adma that’s just been riding up on this daily chart it’s been very impressive the the paler strength but my thought last week was that they were just going to continue to hold this thing up a little more into the NASDAQ Edition so we saw on Friday late evening when the NASDAQ did its kind of shuffling out of some companies to added new companies that they got rid of uh smci as an example they added paler micro strategy and axo N uh so for paler that was like very widely telegraphed pretty much everybody knew that that this was going to happen um they bought it up very heavily into into the last hour uh yesterday and at one point this morning they they gapped it up decently as well and then really ran it off the open uh my expectation was that this was going to be a little bit of a sell the news type of an event so I was shorting pretty heavily uh today pre-market and then into this opening up move when it extended up in the five minute I got I got a couple great prices on a short I’m like a large short a shorted uh 777 3 I think on size 7782 was the high so little bit lucky a little bit lucky on the exact pricing there but caught this big pullback the question is can can um paler close below this adma on the daily chart for the first time if it can close below it traded below today it traded below again one day last week if it can actually close below then maybe the structure of the the technicals is beginning to change and I can get finally a little bit of a deeper deeper pullback so I think today’s close and pound is really important but broadly I think that the NASDAQ Edition was a sell the news event and I also think that we’re going to start seeing a lot more Insider selling coming back into the stock from my research it looks like there were some insiders because they have to file ahead of time when they want to sell uh file in such a way that it seemed like it was maybe getting timed with a potential NASDAQ addic addition maybe um so we’ll we’ll see what happens and see how it closes today but so far so good uh good stuff um when it comes to uh a stock like this where you you know at one point were you were shorting and the the stock was definitely going against you um how do you you know shake off a trade like that and approach it with Clear Eyes clear mind uh to have a successful trade like you’ve had in the past few sessions um I I think a lot of that is like trading psychology related and experience related it it takes a lot at this point to really shake me up when it comes to a trade um I was down a lot of money at one point on that big day when it gapped up to above $80 because I was already I was already swinging it was already swinging it short had some size it Gap it gapped up big that’s the type of moment where a more unexperienced Trader can become less objective about the actual chart and the extension and everything and and more just focused on their p&l and freak out and liquidate their position uh I’d like to think I’ve been doing this too long now for that to be me I’m I’m going to trade the stock I’m going to trade the chart so even though I was down a lot at that point I just uh I said this is this is the spot this is the spot where I need to actually size up and short it so despite the amount of money that I was down I just sized up in a really big way on that day and um I did well with it you know I think that I can trade well enough to manage most positions even if they’re against me where I can mitigate that loss and and potentially become profitable with it good stuff all right you said you are shorting Tesla today uh maybe let’s take a look at the Tesla chart and you know what are you seeing that says short sure so it it’s once again just this extension phenomenon um I might be a little bit early here in Tesla so I’ve got like a a core position that’s a little bit smaller that I’m going to stick with that I’m going to continue to build into as it goes against me but into this upper like 450 area 460 area that is trading in right now I I I sized up a bit was able to cover a little bit of that in this um kind of brief pullback on this 460 uh and and on the bigger size I’ll probably have to stop myself out on New highs I need this thing to break back below like 455 to 456 if it can do that I’ll probably get paid much better on on the trade so that’s kind of what I’m looking for technically right now if we can get back below that I’m probably going to get much deeper correction that begins to correct this daily chart um this daily chart move has been incredible you know to to remind everyone and I always think it’s important to remind everyone this even as I’m short the easy money was to beong Tesla we had called out a very simple breakout trade back here on December 5th for the 360 breakout beautiful bullish wedge into that 360 you could have bought through 360 that day versus the opening low for about 50 cents worth of risk and at this point you could be $100 in the money for 50 cents worth of risk on a simple straightforward breakout literally like the first trade that I would teach to a brand new entry level Trader who’s never traded before is the specifics of how to do that that breakout 50 cents risk in in Tesla is extremely small I mean just a phenomenal phenomenal trade now at this point though on day one two three four five six seven like day eight maybe you could argue that um on 1212 a couple trading sessions ago the count resets because it was a little bit of a a negative day it wasn’t even a pullback to the adma it was barely a negative day at all but it was a negative day so you could argue that it’s a day whatever I just said day eight it’s really kind of more of a day two though because of that little rest day so I’m I’m recognizing that my short here could be a little bit early in in some my more ideal like trading setup would be if a stock closes strong today and then gaps up again tomorrow that would be one that that that’s that’s the trade that’s paid so consistently these last couple months is when you get like two three big updats in a row and then a really big gap up after that again that’s exactly the the pattern we were just looking at with paler two big up days in a row massive Gap up on the day three with Tesla if we could get two big up days in a row and a massive Gap up on day three that would be the trade that gets me really excited but at this point as we come into this 560 area the 80 EMAs is down at 414 the the 21 EMA is down down at 374 so I’m really looking for a move down to this 21 EMA is kind of how I’m managing the position at this point at least my my bigger picture position and then the additional size I just took in this 460 was based on a combination of factors um there was a huge buyer that I was able to identify in the level two that was really driving this thing up the entire way and and he or she was buying on on a very unusual exchange that I don’t typically see use that often Mia X and that buyer kind of ran out and I haven’t really seen him or her appear again since this 1125 am high the stock did manage to consolidate on the moving averages you know that buyer is not the only buyer that’s out there and and break to a new high but that break on that new high through that 460 there was no real I feel like conviction on it um the the strength that drove this uptrend intraday here from this pivot low at 436 to this pivot high at $459 you know $23 up move didn’t come back in on this new high so if the B the main buyer that I was looking at that was driving this thing up is gone they’re not pushing it higher in the same way anymore that was just something that I was eyeing to potentially size up bigger on the short but now I actually need some downside levels to break that will begin to create a feedback feedback cycle of selling to come into the stock if you can break some support level s some of the Longs will start to get stopped out it’ll probably bring in some more momentum shorts and then I can actually get the the bigger push uh again the area I really need I think I needed to break is like 455 on the downside so I’m recognizing it’s counter Trend trade I’m covering fairly aggressive above 455 but if I can get a break at 4 55 then I’m going to become um uh a lot more conservative in how fast I cover to look for a bigger move on some of the size that I have and try to make this short a really good rre hord and if I’m wrong and and this underlying bid that’s here with these moving averages and plus a really strong Market causes it to break new highs then I probably need to to size down and reassess you talk about how you uh were looking at the level two to you know figure out the Dynamics of the trade today how do you explain a little bit more how you use the level two alongside the technicals on a chart in your day-to-day trading um I wouldn’t say I use it in my day-to-day trading anymore to to be totally honest so today was a an abnormal thing for you it it it’s kind of special sit special situations now for me to really watch the level two um I think that understanding technicals and charts is significantly more important in the Modern Age of trading than trying to identify buyers and sellers in the level two the execution uh Brokers and Traders that are out there working orders for large institutional firms are so much smarter than they ever were previously it if we go back 10 plus years ago you could make a living just off of how bad institutional execution Traders actually were in working institutional orders and these days it it’s almost entirely algorithmic that’s doing that it it’s not really human beings that are doing it and the algorithms have have evolved in such a way where they are really sophisticated and they want to be be that way so that you know day Traders don’t come in and and pick them off uh there are still certain situations though where the level two can be important sometimes it’s these you know big big updat like this if you can identify where that buyer is coming from that’s really important information again you know seeing it on an unusual exchange that was coming in and just it was like a a refreshing buyer and then if he got hit a lot he would pull back but then come in at a lower price and then if the stock move higher come back in a higher price that’s someone who knows what they’re doing who was really working in order in Tesla today uh but haven’t seen that buyer come in on that exchange again since so and and the entire profile of the stock changed once that was gone as well so certain situations um this happen to be one uh trading earnings is can be another situation where recognized in the level two and the tape uh can be really important I find that the the tape trades much more pure after hours than it does during the day um sometimes the new situations and and that’s really about it all right all right um Nvidia the former star of the stock market in 2024 is officially or might have jumped back up a little bit but officially hit correction territory today down 10% from the last record close what are your thoughts about Nvidia here after the year we’ve had and now that you know Tesla is more the star of the show when it comes to the market nvidia’s kind of been on the back burner we’re getting that Tesla right roll over right now uh Greta let’s see if we can get break break through this 455 uh what what are we talking about Nvidia Nvidia everyone derck is a real Trader and he he trades while we do these things so yeah I I just I covered some Tesla while you’re were asking me about the about the Nvidia position but I need that Tesla to break that 455 um so yeah Nvidia in correction territory as of today um you know what was the start of the show in 2024 Nvidia was the market and that is definitely changed in the past month so Nvidia in correction territory what are your thoughts today so the profile the stock has changed uh the technicals are not as bullish as they were you have this lower high that came in on uh December 5th I was buying it and some members of my team that I work with are buying it on November 27th caught this move higher I thought if this thing got could get above 142 it could go back After Highs it gave a really nice move here but then it failed there created a lower high and then today even though I didn’t personally take it we actually called for this to be a uh potential short setup versus like 135 at the open today and that worked really well it’s breaking more support levels today it’s incredible that it’s doing it with the cues being as strong as they are you know the cues at this point right now as we’re talking are hitting what I classify as uh extreme extension on like the smaller time frame of the daily chart so that’s why I start to short some some tle Q also just a little bit before we got on our on our meeting today but it’s incredible to see the relative weakness in Nidia it’s also incredible to see that the cues are able to hold up as well as they have but you’ve got right exactly but you got Apple that’s been running you got Amazon that’s been running you got you got Google that did the quantum computer whatever that’s been on a on a tear ever since then and it seems like there’s been a little rotation with this AI trade from uh the picks and shovels or the the rails as I like to call them to the revenue producing companies on more like the software side so that’s why you’re seeing some of these AI plays like an Amazon and a Google still trade well but Nvidia is getting a little bit hit here and and really under the surface that’s that’s all money rotation uh an interesting comment I want to bring up from YouTube he said I wanted to short test today but options are too pricey Trump cutting eveve I know you don’t do a lot of options trading and you are Pure Stock uh most of the time pure pure equities so instead of you know buying puts you’re you’re shorting the actual stock uh why is that your preferred you know way to do things versus buying options you know in a in a Moment Like This options are expensive the foots are expensive but the stock you know you can short so your thoughts sure so so Tesla just held that 455 456 area as as support which was I was afraid might happen um now it’s bouncing off a little bit there so I was able to cover some in front of that support level if it could break through it it’ll become a bigger trade but we’ll see if that happens or not not looking good with this little bounce here unless we get a little lower high off of it um yeah I mean if if the option risk reward is no good because of the expense of the option take the stock and if you can’t afford to take the stock then become a Prof Trader where you’ll be able to afford to take the stock I mean I don’t really have anything else to to say about that I trade options but I don’t typically I don’t do a ton of buying options I don’t I don’t buy a lot of calls and puts I I sell puts sometimes when it’s advantageous for me to do so um um you know if you’re if you’re a prop Trader whatever’s in your account you can get leverage at 20x for day trading and 8x for overnight positions on the equity side so it just um I think it makes it much more advantageous than trading options for directional moves so that’s that that’s why I do it and if the person is interested in that I would have them reach out to T3 to learn more yeah all right uh we are two days away from the final fed meeting of 2024 you know it’s been a year of uh rate hikes and rate Cuts all within one year expecting another rate cut the Market’s pretty unanimous on we’re getting a rate cut the focus of course is on the language around that rate cut and the future uh plans for rates uh what are your expectations on you know how the market feels about this week’s recut being the last one of 2024 yeah so it’s it’s fully priced in I I I think I saw this morning a 95% probability of the the FED cut happening and I I never thought for a second that the FED cut wasn’t happening to to be totally honest but as we got through a bunch of these economic numbers last week like the CPI just it just fur further confirmed things so like you said it’s about it’s about the future um and I I wouldn’t be surprised if they indicate that they want to take a little bit more of a pause as we go into 2025 to get more data um get more data to make sure that you know the economy and the inflation situation is staying good they cut by a full percentage point at this at this point so I think that that makes sense as well um the market might not like it though because I think the market at this point is still pricing in a lot of cuts for 2025 and if they announce that they’re slowing down or indicating in some way that they’re going to be more data dependent then there might be a little bit of a problem there all right good stuff all right so we have what is it we have 14 days 15 days left in the year and then what is that like two weekends couple holidays so probably like 12 12 or 11 more trading in the year I think um you know we’re in we’re coming up on Santa Claus rally territory end of the year all of this stuff and then January effect happening also you know in the new year uh what are your expectations as a Trader as we head into these final two weeks of the year yeah I’m I’m still a bull you know the seasonality has been bullish the flow is bullish um everything at this point continues to to be bullish the technicals are bullish we we did see a little bit of a breath drop off in the last two weeks if you look at like the Spy versus the equal weighted S&P it hasn’t been trading as well if you look at the iwm versus The Q’s it hasn’t been trading well but I’ve never felt that bad breath is a is an indicator of uh you know it’s like a bearish technical indicator I’ve never felt that way the studies don’t show that it is as often as weakening um breath leads to a broader pullback a lot of times it probably equally as often the opposite where the uh like just just the leaders are leading the market higher and then eventually everything else decides to play catch up so you know we’ll see what happens but but broadly I’m still bullish until at least mid January at this point if at mid January we get a little bit of a I think um a stop in in some of the the broader bull flow that’s been forced to come into this Market uh and we can kind of see what positioning in the technicals look like at that point for if it makes sense to be more cautious uh and and I I have gotten a little bit more cautious uh into into this up move overall with the market especially like I just said the cues are kind of hitting my uh measure of short-term extreme upside extension just as we’re as we’re talking so technically that tells me I should become a little bit cautious as well but broadly I’m a bull for for the next month for for the rest of the December for the first couple weeks of January and then we can reassess as we get closer to mid January okay and we’ve talked about what you’re currently doing uh you had a penter short you’re managing a Tesla short right now what are some of the other setups in the market this week that you’re eyeing as a Trader sure so I’m in 23 positions right now I think four of them are short S Tesla uh paler The Q’s um everything else that that means I still got 19 Longs on or so so that just shows you the bullishness that I have I do build out of those Longs a little bit as the market moves up um and especially as we we become more extended but big trades for me the last couple of months have been trading some of these just crazy extension names when they’re when they start going wild you know like this s so today that I’ve done pretty well with or I’m not in them right now but I’m I’m watching them really closely like this qut having another really big day today I see it it just uh it pulled back like a dollar or so from its High um what’s the other one R GTI I was trading this last week I did really well with it got out of that short position uh at $6 now it’s back to $9 to new highs again today it’s getting a little bit silly if I can get those names to it’s the same pattern it’s that same extension pattern it’s been it’s been playing so well if I can get those names to close well today and GAP up tomorrow I’m probably going to be looking to short them also uh so that’s been a lot of where some good money has come in and um yeah that’s it good stuff all right everyone who’s with us live uh you can go no that’s your screen there’s my screen all right you go to3 live.com doive to get Derrick’s free ebook again dererk is a professional prop Trader with T3 Trading Group uh his ebook is about the benefits of that uh he mentioned some of those benefits earlier uh the leverage and the ability to buy equities uh because you have the money to do so uh with the leverage you get from The Firm so again T3 live.com doive uh dererk and I will be away for the next two weeks because he’s traveling then I’m taking some time off for Christmas so we’ll be back in the New Year everyone H good luck with your trading dare good luck with your trading as well and see you in 2025 thanks Greta happy holidays Happy New Year and I’ll look forward to us crushing it in 2025 all right have a great one bye see you