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

E-Mini S&P 500 Futures Review/Analysis
As I mentioned in last night's post, that 1125-1128 area is heavy resistance, and that worked very well today with 1125 being the high of day (I shorted 1124.50). After that, it was orderly selling down to support (initial resistance area became new support area). Price then tested yesterday's high a couple of times, and sold off down to the Initial Support area. We got a nice bounce at Initial Support back to the 24-hr session midpoint with a close right above the Initial Balance Low. I'm still viewing this as consolidation and will continue using the 1112.50 level as my Bull/Bear Line in the Sand to establish bias. This is the second day in a row with price closing below the mid-point; a cautionary flag for the Bulls.

ES 5-Minute Chart


ES 30-Min Volume Profile Chart


ES Day Session Volume Profile Chart

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

E-Mini S&P 500 Futures
It's already almost 2:30 AM here, so will keep the notes brief tonight. Currently, the Buyers are clearly in control but price is heading into a heavy area of resistance (1125-1128). In my opinion, that area will be the true test of market strength. But until then, bias is bullish. My bull/bear line in the sand to establish bias is 1112.50; Bullish above it, and bearish below it. Trade well!

Econ Data
ADP Employment Report at 7:15 AM (cst), ISM Non-Mfg Index at 9:00 AM (cst), EIA Petroleum Status Report at 9:30 AM (cst), Beige Book at 1:00 PM (cst).

ES - Daily Chart with Volume Profile and Key Levels

Wed. 02/03/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures Review/Analysis
After yesterday's strong trend day, some consolidation was expected, and that's what we saw today. I was anticipating some range extension to the upside, but looks like the market is waiting on the Friday jobs report before making the next directional push.

ES 5-Minute Chart for 02/03/10

Wed. 02/03/2010 - No Key S/R Levels Tonight

E-Mini S&P 500 Futures
I have two mid-term exams tomorrow, so no time to do the Key Levels tonight. But considering the strong up-trend today, I would anticipate a pullback into support, followed by some range extension to the upside. We have 1103-1104 as Resistance above, and beyond that we could see a test of the 1109-1111 area. Below, we have initial support at 1091.75-1093.75.

Econ Data
ADP Employment Report at 7:15 AM (cst), ISM Non-Mfg Index at 9:00 AM (cst) and EIA Petroleum Status Report at 9:30 AM (cst)

Wed. 01/06/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures Review/Analysis
As mentioned in last night's post, my bias was bullish above 1127, and ES double-bottomed at the overnight Low of 1127.25. From there, ES made rotational moves up into the Initial Resistance Zone and had a lot of trouble getting through that area. After pulling back several times off the Initial Resistance Zone, ES finally made it to the Range Extension area, and pulled back again. I traded both Long and Short, at or near the Key Levels. I also made sure I was buying on pullbacks since I was cautious on the Long side.

ES 5-Minute Chart for 01/06/10 Includes Overnight Globex

Key Support/Resistance Levels (S&P 500 Futures) for Wed. 01/06/2010

E-Mini S&P 500 Futures
The other indexes (YM, NQ, and TF) are showing signs of weakness, which at the very least, calls for some caution on the Long side. Holding the 1123 area on any push down is fairly important for the Bulls. I'm anticipating a bounce in the 1123-1125 area on first touch, due to nervous Bears covering their positions and over-confident Bulls adding to their Long positions. A break of that 1123 support could take us to the 1118-1120 area in a hurry. Bias is bullish above 1127; neutral to bullish above 1123 and bearish below 1122.

Econ Data
ADP Employment Report at 7:15 AM (cst), ISM Non-Mfg Index at 9:00 AM (cst), EIA Petroleum Status Report at 9:30 AM (cst), and FOMC Minutes at 1:00 PM (cst).

ES - Daily Bar Chart with Volume Profile and Key Levels

Thursday 12/03/2009 - Market Review

I noticed the Blog has gained a few new followers. Welcome to the Blog and I hope we can collaborate and improve each others understanding of the markets!

It's worthwhile to go over today's market action to connect the Key Levels posted last night with today's price action. Lets start from the open and go through the day step by step (this is an exercise I do everyday on my own after market close):

Market gapped up 2.75 pts at the open and extended beyond the Globex High and hit 1117, which served as resistance and we got a strong rejection at that level.

Selling pressure accelerated once price broke down through the mid-point and VWAP (Vol Trend).

1108 was posted as the Key Initial Support level, and price bounced up from 1108.25 to 1111.50 (3.25 pts).

Break of 1108.25 took us to 1105.50 (2.75 pts). 1105 was also posted as a level, and my bias was bearish below 1105. The first bounce off 1105.50 took us to 1109.25 (3.75 pts).

Price rotated down again and hit 1105.25 (1105 level working beautifully here). This time we got a strong bounce up to 1110.75 (5.50 pts).

1111 area was the Mid-Point and price remained below this area rest of the day. One of my trading rules states: "If Price is less than Mid-Point; Only take Shorts unless Price is rejecting a lower area of support such as the Lower Value Area."

Price was then range-bound between 1107.25-1110.75 (3.50 pts). We had a cluster of VPOCs in the 1107-1108 area.

Around 2:20 PM (cst), price broke down through the first hour low on accelerated momentum. Last night's post called for a bounce on first touch at 1100.25, but given the time of day (late afternoon), I'm not surprised that we did not get a bounce. Typically, if price is below the initial balance (1st hour low) in the afternoon, it has a tendency to close at or near the lows.

The next level after 1100.25 was 1097, and we closed at 1097.50. Price is currently trading at 1098.50 in the Globex session.

Review the following annotated 5-minute chart and see how the day played out. If today's price action surprised you, then it could be a sign that you need to come better prepared. I hope this post clarifies some of the concepts I utilize, and connects the nightly key levels to actual price action.

ES 5-Minute Day Session Chart for 12/03/09

Key Levels and Scenarios (S&P 500) for Thursday 12/03/2009

E-Mini S&P500
I was busy last night and wasn't able to post the key levels and scenarios, but my bias has been bullish and we tagged the 1115 level that I mentioned in my last post from Monday night. At this point, I still don't see any sign of weakness in the S&P. For the past three days, prices have either remained in the upper half of the previous session's range, or extended to the upside. As I type this (12:30 AM CST), ES is trading at 1114.25 (1111.50 is near-term support over-night now), building value above Wednesday's VPOC. My current bias is bullish above 1108. Shorts are counter-trend at the moment.

Jobless Claims and Productivity and Costs data out at 7:30 AM (CST), ISM Non-Mfg Index at 9:00 AM (CST) tomorrow morning. To top it off, both Ben Ber"tank"e and Barack Obama, speak sometime tomorrow which could move the markets. Be careful...and do NOT fight the momentum! If you are going to enter counter-trend trades, initiate them at Key Levels so you can bail at close to break-even if you happen to be on the wrong side of the market.

Bullish Scenario (above 1108)
1108-1109 is initial support, and I'm anticipating a bounce on first touch. Below that, we have a VPOC Cluster in the 1105-1107 area, and then strong support in the 1100.25-1102.25 area. On the upside, some chop/rotation in the 1115 area wouldn't be a surprise. Beyond 1115, I would scale out of Longs in the 1117.75 area, and move stop-loss on remainder to 1115 at that point. We also have that 1122 level above that's just begging to be tagged!

Bearish Scenario (below 1105)
Support levels are defined, and I'm staying out of shorts between 1108 and 1115. I would consider shorts on an extension to the 1119.75-1122 area. If we break below 1105, the 1108 level could then act as short-term resistance. Shorting the bounce at that point in anticipation of a move down to test the 1101-1102 area would be a decent play. There is a cushion of support from 1108 all the way down to 1100.25, with 1100.25-1101.50 being pretty strong. Anticipate a bounce on first touch, which means it's a good place to scale out of shorts and then re-load if price remains below 1108. The bounce could be pretty damn strong though, so be careful initiating shorts on a bounce at 1100.25. By that, I mean, don't re-load at 1103; wait for the momentum to stall on the bounce as price could easily retrace back to 1108.

ES - Daily Bar Chart with Volume Profile and Key Levels

Thursday 09/03/2009 - Range-Bound (again)

Today provided a few good trade opportunities but timing is always critical, and if you missed the entries, then best bet is to avoid the chop. Today was Day 2 where the day session remained within the Globex/over-night range. Again, fading the extremes would have been profitable.

I look at charts on ThinkorSwim during the day when I can take a break from work, and will put on a trade using their Simulator if I see a good area for entry. I went Long 3 contracts at 996.00 around 2:00 PM (central) and scaled out at 997.00, 998.00 and 1000.00.

Employment Situation out at 7:30 AM (central) tomorrow morning.

ES - 5-Min Chart for Wednesday 09/02/2009

Tuesday 05/05/09 - Minor Pullback

Narrow range day today (11.25 pts). 887-890 was solid support in the ES, but we did get several opportunities to short at the mid-point. With the big up-trend day yesterday, consolidation in this area was expected. But typically when price is below the 1st hour low in the afternoon, it tends to close at or near the lows so I was expecting a break of 894, which we got but without any follow through. Instead, price hit 893.50, and then quickly re-bounded back up. The NYSE $TICK moving averages also hovered close to the zero-line most of the day which is usually a recipe for choppy price action. On the 60 min chart, today's pullback was very minor (23.6% retrace of 862.50-904.75), so the bias is still bullish but everyone and their mother can see that price is getting over-extended to the up-side here. But maybe that's the problem: everyone's expecting a pullback, which is a good reason for price to continue moving up.

I was able to scalp for +6.25 points. I didn't have time to markup the trades on my chart today but gains were split pretty evenly among Long and Short trades.

This brings me to a question; do you adjust size and risk management parameters on consolidation days (day after big trend)? If so, what kind of adjustments do you make? For example, reviewing today's price action, there were several areas where you could be in a trade, and ADD to your position even if it went against you by a few ticks, and still have manageable risk on the trade since the support/resistance areas were clearly defined, and a big up/down move wasn't expected.

On to the price action charts...

ES 610-Tick Bar Chart (Open and Morning Price Action)


ES 610-Tick Bar Chart (Afternoon Price Action)


ES/$TICK (3-Min) - Notice where $TICK MAs spent most of their time