Wed. 03/24/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures
Last night's post called for a consolidation day with narrower range (8-10 points), which played out well today. The day session range was 7.75 points, and the 24-hour session range was 9 points. I was anticipating Responsive Buying at 1161, and that turned out to be the low tick of the day. We're continuing to build acceptance (volume) in the 1163.50-1164 area. I expect selling pressure below 1164, and buying pressure above it.

ES 5-Minute Chart


ES Day Session Volume Profile Chart

Wed. 03/24/2010 - S&P 500 Futures Key Support/Resistance Levels

E-Mini S&P 500 Futures
After Tuesday's late afternoon upside breakout, a test of the breakout level (1165.50) is expected; and it looks like we may even get it in overnight trading (ES currently trading at 1167). My plan for tomorrow is to buy the dips into the Key Support Areas, and Short the upside moves into Resistance. There wasn't much buying interest in the 1170-1170.50 area, and I'll be looking to Short it on first touch. I'd be cautious initiating Longs above 1170 since I'm anticipating significant rotation in the 1170-1180 area. If the break-out is "real", I would expect 1163 to hold; a break of 1158.50 would make me suspicious of this upside breakout move and we may get a stronger move down (failure of breakout). I'm expecting consolidation here, and a narrower range day (8-10 points).

Econ Data
Durable Goods Orders at 7:30 AM (CT), New Home Sales at 9:00 AM (CT), and EIA Petroleum Status Report at 9:30 AM (CT).

ES - Daily Chart with Volume Profile and Key Levels

Thursday 02/25/2010 - E-Mini S&P 500 Futures Review/Analysis & A Word on NYSE TICK

E-Mini S&P 500 Futures Review/Analysis
What a day -- the ES fell 17 handles from the overnight high of 1101.50, and did a complete reversal, and then some, hitting a high of 1103 (+18.5 points from Low of Day) and closing on strength at 1102.25. Unbelievable day, and no doubt a lot of Shorts got squeezed, but there were some hints that kept me on the right side of the market. At 9:40 AM (cst), I posted "Doesn't 'feel' like a trend down day (yet)" and at 11:56 AM (cst), I posted "1087.75-1088 = Support", and began scalping ES on the Long side -- Bear in mind, I still kept my risk on the Longs very tight because the way I was reading the market, a break of 1087 could have resulted in a swift move down to 1084-1085. Between 10:40 and 10:56 AM (cst), ES attempted to test the 1084.50 Low of Day, and failed to do so (hint #1). From 11:08 AM (cst), price remained above the day session mid-point and VWAP (hint #2). After 11:40 AM (cst), Price continued to test and poke above the IB High (hint #3). Looking at the 30-Minute Volume Profile chart, I was seeing acceptance in the 1087.25-1088.25 area (hint #4). By the way, none of what I'm posting here is hindsight analysis; all of this was observed and acted upon in real-time. If you noticed something in real-time that I haven't covered here, please post it in the Comments.

A Word on NYSE TICK
A lot of traders use the NYSE TICK in their trading, and a popular strategy is to fade the TICK extremes (Sell +1200 readings, Buy -1200 readings) and to identify divergences (price makes lower low while TICK makes higher low, etc). Blindly entering trades on TICK Divergences or TICK Extremes is not a viable strategy, and may eventually frustrate you to the point where you ditch the NYSE TICK all together -- which IMHO, would be a mistake because I believe the NYSE TICK is a valuable measure of broader market participation. One of the Keys to using the TICK is to be aware of the Context and the Significant support/resistance areas, and then identify divergences or extremes once price reaches a pre-defined support/resistance area. Check out the 2-minute chart of the ES and NYSE TICK below. Notice how we got a TICK Extreme at 12:50 PM (cst) -- TICK hit a high of +1258, while price hit a high of 1092.50. If you blindly shorted there (I'm sure several traders did), you got stopped out pretty quickly (I'm assuming you use stops). Now move a few bars to the right, and you'll notice another TICK Extreme at 1:02 PM (cst) -- TICK hit a high of 1299 while price hit a high of 1098.50. What's the difference between the two extremes? Look at the Volume! Exhaustion moves happen on High Volume as traders on the other side get flushed out of their positions. This is a TICK Extreme fade trade that could have been taken (I shorted this area and covered at 1096). Trading the TICK is certainly not a science, and more of an Art and like every other indicator or piece of market information, it requires screen time. With enough screen time, you could internalize the patterns of the TICK, and develop a "feel" -- this is difficult to quantify, but in the end, it could keep you out of losing trades or give you a heads-up when the market isn't behaving the way it normally does. I hope you found this information to be of some value, and that it helps you to stay on the right side of the market. At the very least, I hope you won't blindly fade the TICK Extremes.

ES/NYSE TICK 2-Minute Chart


ES 5-Minute Chart


ES 30-Min Volume Profile Chart


ES Day Session Volume Profile Chart

Thursday 02/25/2010 - S&P 500 Futures Key Support/Resistance Levels

E-Mini S&P 500 Futures
With Wednesday being another inside day, the Key Levels haven't really changed much but there's a higher probability of a break-out from the current Range (range contraction leads to range expansion). My bias is bearish below 1102 and bullish above it. A break of 1090.25 could trigger heavier liquidation and drive price down to the mid 1070s. A break-out above 1105.50 could take us to the 1118-1121 area. My only other concern is that with GDP and Existing Home Sales data out on Friday, we may not get clear direction until then. Keep it tight, stick with momentum, and do not add to a losing position (with strict risk parameters and discipline, averaging into a position works OK on range-bound days).

Econ Data
Durable Goods Orders and Jobless Claims at 7:30 AM (cst), Ben Bernanke speaks at 8:00 AM (cst), FHFA House Price Index at 9:00 AM (cst), EIA Natural Gas Report at 9:30 AM (cst)

ES - Daily Chart with Volume Profile and Key Levels

Thursday 01/28/2010 - Euro FX Futures Review/Analysis

Euro FX (EUR/USD) Futures
Starting to get a hang of the rotations in 6E. Overall, this contract trades very nicely. It's a relatively thin market so it overshoots Support/Resistance areas sometimes, but those are also good opportunities to get into a trade and scale out on the rotation.

EC/6E 5-Minute Chart for 01/28/10

Thursday 01/28/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures Review/Analysis
Some great setups in the ES today. I was busy with work most of the day and only executed two trade sequences: Long at 1076.75 on the pullback around 11:45 AM (cst), and then Short at 1086 near the end of day. I should have Shorted higher in the 1088 area as I posted on Twitter, but I was busy trading the 6E and can only focus on one instrument at any given time since I'm trading off a laptop.

ES 5-Minute Chart for 01/28/10

Thursday 01/28/2010 - Key S/R Levels (Brief)

Again, too busy with school and don't have time for a full post with charts.

E-Mini S&P 500 Futures
In the ES, the areas of Resistance are 1107.25-1109, 1114-1115.25, 1119-1122, and finally 1127. Areas of Support are 1090.50-1091.50, 1086-1088, and 1080-1082.

Euro FX (EUR/USD) Futures
In the 6E, overnight resistance is at 1.4043-4055, followed by 4072-4082, 4100-4110, 4145-4160.

Econ Data
Durable Goods Orders and Jobless Claims at 7:30 AM (cst), EIA Natural Gas Report at 9:30 AM (cst).

Thursday 12/24/2009 (Christmas Eve) - S&P 500 Futures Market Review

E-Mini S&P 500 Futures
We finally tagged that 1122 Level I've been posting for a while now. The market closed near the high of day, which indicates strength and unfinished business in the 1120+ area, and leads me to anticipate upward continuation into early next week.

Have a happy and safe holiday!

ES 5-Minute Chart for 12/24/09 Includes Overnight Globex

Wednesday 11/25/2009 - Market Review

I can't stress this enough: Enter trades at Key Levels! Don't get caught up in the DOM, the tick moves or the color of the current bar/candle. Have a plan prior to the market open, then be patient and wait for price to get to the areas where YOU want to conduct business. A few benefits to this approach:
1) You will have better control over your anxiety/psychology since you're waiting for price to get to the area you want, and you'll be prepared to enter the trade at that level
2) You'll avoid the chop in the middle
3) You'll be able to use a tight stop-loss since the difference between the level where you enter a trade, and the level where you're proven wrong will usually be within 2-3 points, if not less.

Following is today's 5-minute day-session chart. Look at the 5-min chart in conjunction with the Key Levels and Scenarios post from last night. This is simple stuff, just requires some patience and discipline. Happy Thanksgiving!

ES 5-Minute Day Session Chart for 11/25/09

Key Levels (S&P 500) for Wednesday 11/25/2009

E-Mini S&P 500
Scenarios posted last night worked out great today! I mentioned last night that "1098 could provide a bounce, as well as 1094-1095." - and we got a solid bounce at 1095 into the VPOC cluster, with price peaking at 1106.75. ES is currently trading at 1105.50, building value above 1100. Going into tomorrow, my bias is still bullish. From a seasonality perspective, we saw a huge up move on the day before Thanksgiving last year, but 2008 was a crazy year! At this point, I'm bullish above 1100, neutral above 1089 and bearish below 1089. This doesn't mean I won't initiate shorts if we move into the range extension areas (1115-1119), but above 1094, I'd rather buy the pullbacks. Below 1089, I'd like to sell the bounces. Today was an inside day, and the bullish/bearish scenarios haven't really changed since yesterday.

Lot of Econ #s coming out between 7:30 am and 9:00 am (cst). Durable Goods Orders, Personal Income and Outlays and Jobless Claims out at 7:30 am (cst). Consumer Sentiment at 8:55 am (cst). New Home Sales data out at 9:00 am (cst). Be prepared and keep an open mind; even though it's a day before a holiday, we could see some big moves tomorrow!

ES - Daily Bar Chart with Volume Profile and Key Levels

Thursday 05/28/09 - Running on Empty

Today was bad from the get go; no motivation, lousy focus, and lack of sleep weighed on me, and I missed some nice trade sequences in the morning. The mind just wasn't sharp enough, and I was still half asleep when I got to the screens around 9:00 AM (central). Just felt super tired all day. I wasn't around much for the afternoon since I had to take care of some additional paperwork. I got back to the screens around 2:30 PM and placed 3 more trades into the close (2 winners, 1 loser). All in all, a pretty bad day but somehow managed to end with a +3.75 pt gain. For the full-time traders, how do you maintain focus throughout the day? Here are the Stats:

# of Trades	7
Longs	3
Shorts	4
% Break-Even:	0.00
% Win	57.14
% Loss	42.86
Avg Win	1.81
Avg Loss	-1.17
Largest Win (pts)	2.50
Largest Loss (pts)	-2.00
Total Win (pts)	7.25
Total Loss (pts)	-3.50
Net Gain/Loss (pts)	3.75
ES Daily Range	22.50
P/L as % of Daily Range	16.67

GDP out at 7:30 AM tomorrow morning, Chicago PMI at 8:45 AM, and Consumer Sentiment at 8:55 AM.

ES (5-Min)


ES (Daily) - Lower high and lower low, with a Close near the highs on today's Daily candle. Support in the mid 880s below.

Friday 04/24/09 - Be aware of Market Moving News

Started a bit late on Friday morning due to the economic data being released in the morning. It's safer to let the market digest the data, and then enter trades based on some fresh support/resistance levels. I essentially had two trading ideas/sequences on Friday. The first trade was entering Long at the 857 area with an expected initial target of 860.75. That worked out OK for me and then I sat on my hands for the next move. The next area in-play was 860-865.25. My plan was to short a break of 860 (I had a sell stop order in at 859.75) or to buy a break-out of 865.25 with a 3-4 point target in either scenario. I was aware that some "stress-test" related news was going to be out at 1:00 PM (central), and based on price action (trend was up), I was long at 861 with a reversal-stop at 859.75. Seemed like a safe play at the time. Once the news came out, I got stopped out of my Long position, and entered into a Short position, but the move came in so fats & furious, that my short position got stopped out for a 2 point loss on that swing up. I entered long again expecting the up-side to continue since we were in an up-trend prior to the news. But, I got stopped out yet again, so I again, entered short around 860 and exited around 855 (853 was a support level). I ended my trading day there at 1:15 PM (central) with a net gain of +$425.10 with a win rate of 38.4% and an average profit factor of 1.64 (the profit factor on my short trades was 8.85!). I could have certainly handled the situation better by NOT entering Long simply because price reversed after that break of 860. That would have saved me a few hundred in losses. The better play would have been to remain flat into the news, and then enter short on break of 860 with a tight stop or enter long on a break-out of 865.25. Lesson learned! Here's a snapshot of my 610 Tick bar chart from Friday. It should give you an idea of what I look for, and how I read price action:



Looking at this past week's results in TradeStation, my net gain on the week was +$897.40 with a win rate of 39% and an average profit factor of 1.53. This number doesn't include the gains from Tuesday, when I was experiencing technical problems with TradeStation (caused unnecessary losses), and used the Infinity AT trading platform. If I count those trades, the weekly gain would probably be around +$1,600.

Going forward, I'll be looking at 868.75, 872, 878 and 883 as possible areas of resistance. I'll be looking at 860, 850, 848.75 (OPEN GAP) and 833 as areas of support. Hoping for continued upside action!

On to the regular charts...

ES/$TICK (3-Min) - Open Gap at 848.75 Below


ES 15-Minute - Price above 34 and 200 EMA. 850 level held support.