Friday 03/19/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures (Options Expiration / Quadruple Witching)
Trading on Friday was great! The Key Levels and Scenario posted the night before played out very well. I posted "A reversal of the overnight trend is something to watch out for at the cash open" and we reversed the overnight up move at the cash open. If you check the Day Session Volume Profile Chart I've been posting since Tuesday, you'll see I was anticipating a test of the 1150.25-1151.75 Area which we finally got on Friday.

I noticed several complaints on Twitter/StockTwits of failed TICK Divergence setups on Friday. I typically only act on TICK divergences that occur at the Key Areas I post every night. I've annotated my 1-minute TICK/ES chart below, and I hope it provides you with some insight and helps you identify better setups in the future. That being said, keep in mind that nothing works 100% of the time. Secondly, a TICK Divergence shouldn't be the only reason to enter a trade. I typically look for a minimum of two reasons to initiate a trade; but ideally there are three reasons to enter a trade. So my only other recommendation would be make sure you have at least one other reason to enter the trade besides a TICK Divergence.

Enjoy the rest of your weekend and best trading!

ES/NYSE TICK 1-Minute Chart (Morning Session)


ES/NYSE TICK 1-Minute Chart (Afternoon Session)


ES 5-Minute Chart


ES 30-Min Volume Profile Chart


ES Day Session Volume Profile Chart

Friday 03/19/2010 - S&P 500 Futures Key Support/Resistance Levels

E-Mini S&P 500 Futures (Options Expiration / Quadruple Witching)
With Thursday being a narrow range day, the Key Levels haven't really changed much. Two sided moves are typical on quadruple witching Friday. A reversal of the overnight trend is something to watch out for at the cash open. We typically get a reversal of the morning trend around 11 AM (CT), or early in the afternoon. Bias is bullish above 1158 and bearish below. If we break out above Wednesday's high (1165.50), I would expect price to tag the 1170 area. On the downside, I'm expecting the 1139.50-1141.50 Support Zone to hold. On the upside, I'm expecting the buying to shut off in the 1177-1179.75 Resistance Zone. If you want to play it safe, sit out the first hour. Trade well!

Econ Data
No scheduled econ releases. Quadruple Witching Friday. Watch out for news out of Europe/Greece.

ES - Daily Chart with Volume Profile and Key Levels

Thursday 03/18/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures Review/Analysis
Price bounced off the Initial Support area in overnight trading, and stopped 1 tick ahead of the Overnight Resistance Level after the open. From there, we got a lot of narrow range chop, but price remained below 1162.50 and then broke below the IB Low. From there, we got a minor bounce ahead of Initial Support, which was sold into pushing price 1 tick below Initial Support. Price formed a double-bottom at Initial Support and went on to test the IB Low and ended up closing above the mid-point and VPOC, but below the Overnight Resistance. The fact that price couldn't even test the overnight resistance during the day session signals weakness. Market internals closed on weakness as well, and we may finally get that pullback everyone's been anticipating for days now. Price is currently in a neutral area, and built some acceptance in the 1159-1161 area over the last two days. I'll chalk up the choppy price action this week to quadruple witching and the fact that we're at new yearly highs, so consolidation is to be expected. Next week should be more happening (keeping fingers crossed)!

ES 5-Minute Chart


ES 30-Min Volume Profile Chart


ES Day Session Volume Profile Chart

Thursday 03/18/2010 - S&P 500 Futures Key Support/Resistance Levels

E-Mini S&P 500 Futures
The Bull/Bear Line in Sand for tomorrow is 1154. Based on the recent price action and market internals/breadth, the near-term bias is Bullish. The challenge in this kind of market is to keep the personal bias in check, and read the market with an open mind. Can the market fall 15-20 points tomorrow? Sure could, but I'm not going to close my mind to a possible move into the upper 1170s. Both scenarios are possible, and as day traders, we must keep the bias in check and trade what's in front of us. If you get good trade location on your Short positions, take advantage of it and try to hold for a larger move down. Tomorrow's focus will be the Jobless Claims data out at 7:30 AM (CT); so the best trade location may only be available in pre-market.

Econ Data
Consumer Price Index and Jobless Claims at 7:30 AM (CT), Leading Indicators and Philadelphia Fed Survey at 9:00 AM (CT), and EIA Natural Gas Report at 9:30 AM (CT).

ES - Daily Chart with Volume Profile and Key Levels

Monday 03/15/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures Review/Analysis
As I posted on Twitter, the plan for Monday morning was to Short the bounces into the Key Resistance Zones which worked out great. Price was unable to fill the gap off the open, and paused at the Initial Resistance Zone. It then went on to make a lower low. Initiating a Short on the retrace back up was the safer trade, IMO. Trade was better facilitated at lower prices right from the open. On the down move, Price quickly rejected 1136.50-1137.50 (Low Volume Area, 36.75 was my Bull/Bear Line in Sand), and began building value above 1137.50 for remainder of the day. We began seeing more aggressive buyers come in to the market after 2 PM (CT). The NYSE TICK provided some nice entries in the Key S/R Areas. I was talking to a friend earlier today about the benefits of doing your homework and identifying areas to do business, and one of the key benefits is that it keeps you from over trading and opening trades in the middle (chop) area. If you're a new trader and still learning to navigate the markets, you can significantly reduce your risk by simply initiating trades at the Key Levels. I personally use a 6 tick max stop-loss, but if you're new and need some more wiggle room, a 2-3 point stop would work fine as well. Use the Key Levels and fine-tune the entry using the NYSE TICK. Check the 2-minute ES/NYSE TICK chart below highlighting some Divergence setups (note: I use 1-minute ES/NYSE TICK chart in my trading). ES filled Friday's gap near the close. We closed on strength near the high of day, so price action is bullish going into tomorrow's FOMC Announcement, which could provide direction on the next swing.

ES/NYSE TICK 2-Min Chart


ES 5-Minute Chart


ES 30-Min Volume Profile Chart


ES Day Session Volume Profile Chart

Monday 03/15/2010 - S&P 500 Futures Key Support/Resistance Levels

E-Mini S&P 500 Futures
We're near a short-term inflection point here. Everyone has been expecting a healthy pullback for more than a few days now. My Bull/Bear Line in the Sand is 1136.75, and the current near-term bias is cautiously bullish. We could see acceleration in Selling pressure if price gets below the 1132-1133 area. I would anticipate Buying pressure to pick up above 1147.

Econ Data
Empire State Mfg Survey at 7:30 AM (cst), Treasury International Capital at 8:00 AM (cst), Industrial Production at 8:15 AM (cst), and Housing Market Index at 12:00 PM (cst.

ES - Daily Chart with Volume Profile and Key Levels

Friday 12/18/2009 - S&P 500 Futures Market Review

E-Mini S&P 500 Futures (Options Expiration / Quadruple Witching)
The key levels and scenario posted last night worked very well today. I posted "we may get a small range extension to the downside, but I'm expecting the 1088s to hold as support" -- that worked out nicely. We got a 2.25 point range extension beyond yesterday's Low of 1090.75. Responsive buyers came in at 1088.50 and pushed price back into the Initial Balance. Beyond that, I was anticipating a test of the IB high, and we got that as well. Overall, the scenario worked out great! I hope you banked some $$$ going into the weekend! Review my annotated 5-minute chart for details.

ES 5-Minute Chart for 12/18/09 Includes Overnight Globex

Key Levels & Scenarios (S&P 500 Futures) for Friday 12/18/2009

E-Mini S&P 500 Futures (Options Expiration / Quadruple Witching)
I'm anticipating tomorrow to be a range-bound day. We may get a small range extension to the downside, but I'm expecting the 1088s to hold as support. If you want to play it "safe", best bet would be to let the Initial Balance develop (first hour of day session), and then anticipate price to remain within the IB range for better part of the day. I'm not anticipating much of an extension past the first hour high/low.

Scenario
My bias is bullish above 1093 and bearish below it. Price is currently at the initial resistance zone. If it breaks above this zone (possibly overnight), the next area of strong resistance is 1099.50-1101.50 and I am anticipating a pullback on first touch. Above that we have some resistance in the 1103.50-1103.75 area. Buying could accelerate above 1103.75. Expecting 1109.50 to hold. On the downside, I am anticipating a bounce on first touch of the initial support zone. If we break below 1093, I'm anticipating a quick move down to the 1088-1089.50 area. Anticipating 1088 to hold. Below 1088, we could see a range extension down to 1084.75. Again, be aware of options expiration and be cautious buying new highs on the day or shorting new lows -- price could reverse quickly.

ES - Daily Bar Chart with Volume Profile and Key Levels

Thursday 12/17/2009 - S&P 500 Futures Market Review

E-Mini S&P 500 Futures
The scenario posted last night worked great today. We opened way below yesterday's IB Low, near the 100% range extension level, got a nice bounce back to mid-point and then rotated down all day (as anticipated). Check the 5-minute annotated chart to see how the levels and scenario played out. Hope you guys were able to bank on today's setups!

ES 5-Minute Chart for 12/17/09 Includes Overnight Globex

Key Levels & Scenarios (S&P 500 Futures) for Thursday 12/17/2009

E-Mini S&P 500 Futures
Anticipating range expansion and a trend day tomorrow. Pay attention to the overnight trend going into the open; anticipating that trend to remain intact for better part of the day. It goes without saying, that trades should be taken based on real-time price action. It's OK to anticipate, as long as you're willing to toss the idea if it's not working out.

Scenario
Initial support is in the 1100.25-1101.75 zone, with 1096.25-1097.50 below that on a range extension. On the upside, initial resistance is in the 1107.50-1109 area, with the range extension target/resistance around 1114. I'm bullish above 1109, neutral to slightly bullish above 1100 and bearish below 1099. Regardless of direction, I'm anticipating rotational moves where price takes a pause at the support/resistance zones, rotates 2-4 points and then continues in direction of trend. Opening above Wednesday's IB Low (1108) would also be bullish; bearish if we open below. Like I said before, note the trend in the overnight Globex session and trade in direction of trend, until it is broken. Currently, the trend is bearish, but price is trading within the Initial Support zone, so I would not initiate shorts in this area since I'm anticipating a bounce on first touch.

Economic Data
Jobless Claims out at 7:30 am (cst), Leading Indicators and Philadelphia Fed Survey at 9:00 am (cst). Trade well!

ES - Daily Bar Chart with Volume Profile and Key Levels

Friday 03/20/09 - If, Then, Else

When I was working full-time, my trading method comprised of taking counter-trend scalps for quick wins. But now that I can spend some focused time in front of the screens, I've been working on adapting to a trend-following method, where I wait for confirmation of trend and then enter a trade on a pullback, in direction of trend. The trend is defined using the 3 minute and/or 5-minute chart, and a micro-trend can be defined on the 610-tickbar chart. I got to the screens around 9:30 AM and traded the morning fairly well, initially taking shorts, and then switching to longs when 775 area began to show signs of support. I also realized that the 780.25 level was acting as resistance (it was the mid-point of the market), and I posted a message on my Twitter page saying "I'd like to see a break of 780.25 before I enter Long again". The thought process was IF 780.25 breaks, THEN enter a Long position. What was missing from that thought was the ELSE condition, and that was my down fall and one of the reasons I gave back the +$237.50 morning gain later in the day. I recognized 780.25 as resistance, but since my thought process only had the IF condition supporting my Long bias; the idea of shorting that level elluded me. I should have either shorted that level when price couldn't break through it, or introduce another IF condition along the lines of: IF price breaks down through 775 THEN enter short! Trading really can be as simple as identifying trend, and then setting up a couple of IF/THEN/ELSE statements in your mind to react to the price action. Sorry if all the "if/then/else" talk sounds weird, but I'm a Data/Software Architect, and this makes a lot of sense to me. I'd love to hear your thoughts on this. I'll be working on incorporating the ELSE condition into my thought process starting Monday. The other reason (and probably the main reason) I gave back the morning gains was lack of discipline. I started going against the trend and entering Long positions trying to catch the bottom. I should have waited for the market to confirm the end of the down trend before entering Long. Ideally, I should have shorted the pops all the way down, and then entered Long once the market confirmed a reversal in trend. To summarize, I traded the morning fairly well, and switched to trading like an idiot later in the day. The only smart thing I did was shut down the charts when my P&L got back to $0.00.

ES 610-Tick bar Chart (Morning Trades)


ES 610-Tick bar Chart (Afternoon Trades)


ES 15-Min


Gap filled within 15 minutes


ES/$TICK (3-Min)