Sunday, November 29, 2009

Key Levels and Scenarios (S&P 500) for Monday 11/30/2009

E-Mini S&P 500
Despite the big moves on Thursday/Friday last week, the key levels haven't really changed much. 1198 is immediate resistance, with the overhead initial resistance level at 1101.75. Initial support is 1089.25. ES is currently building value under 1097. Last year, the Monday following Black Friday was a straight down trend from the globex overnight session into the day session close. My current bias is to the short side, but I'm not anticipating range extension on the down side. Higher probability of range extension to the upside, since we're already in the upper quadrant of Friday's range.

Bullish Scenario
The initial support zone is 1086.75-1089.25, and I'd like to see that area hold before I consider trades on the Long side. 1082.50 is also still a pretty important area. Ideally, price breaks above 1097, hits the 1101-1102 area, rotates down, and holds 1097-1098 on the retrace. At that point, entering Long with a stop at/below 1098 would be a high-probability trade, IMO. Scale out at 1102, or move stop to break-even and let it test the next area at 1105-1107.50. Scaling out or reversing position to the short side at 1107.50-1108.50 area is looking good as well. Above 1108, the obvious resistance is 1112.25, and then I'll look towards the range extension targets to provide areas to scale out or enter short.

Bearish Scenario
I think the bearish scenario is in-play at the moment. 1197-1198 is holding as resistance. Above that, if 1102 holds as resistance, and we come back down and break below 1098, shorting pops would be the name of the game for me. Who knows, we may not even get to 1102. I would scale out of shorts at the support zones/levels identified on the Key Levels chart.

ES - Daily Bar Chart with Volume Profile and Key Levels

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