Monday, November 30, 2009

Key Levels and Scenarios (S&P 500) for Tuesday 12/01/2009

E-Mini S&P 500
Scenario and levels played out beautifully today...very structured moves and consolidation at known levels. Today's price action helped solidify the support in the 1082.50-1086 area. We can discern two things from that: 1) We'll probably get a bounce on first touch and 2)If price breaks through support, anticipate a fast move down to the extension targets. Monday's range was also within the top half of Friday's range (bullish). Price is currently at 1095.50 and building value above Monday's VWAP (1091). 1089.50-1091.25 is strong support at this point and I'm anticipating a bounce on first touch. My immediate bias as of this writing (11 PM CST) is bullish.

Redbook data out at 7:55 AM (cst) and ISM Mfg Index, Construction Spending and Pending Home Sales Index out at 9:00 AM (cst). Monday was an inside day. We've consolidated and accepted value here. Anticipating range expansion tomorrow!

Bullish Scenario (above 1089)
My bias will remain bullish as long as price remains above 1089. From here, I'd like price to break through that 1098 level, and test 1101.75. We may get some consolidation in the 1101.75-1103.25 zone, but if we break above 1101, I would anticipate a test of the 1106-1108 (a lot going on there). That would be a great place to scale out of a Long position, or if you're adventurous, even reverse to the short side for a rotation down to 1104-1105. Beyond 1108, the 1110-1112 is solid resistance. If price manages to crack above that level, which is possible, tagging 1115 shouldn't require too much effort.

Bearish Scenario (below 1089)
I will not consider shorts unless price breaks below 1089. That is an important area IMO, and if the market is truly gaining steam, the level should hold. At a minimum, I'm anticipating a bounce on first touch in the 1089.50-1091.25 area. If price bounces and starts heading down again, entering short with a tight stop would be a good risk/reward setup. If we break 1089, we could go down to 1082.50 in a hurry, and to 1079.25 below that. Again, the safer play would be to short the bounces from that point on. We have strong support in the 1076-1078 area so scaling out ahead of that would be prudent.

ES - Daily Bar Chart with Volume Profile and Key Levels


  1. The behavior of the S&P fit very nicely with your analysis; despite the bullishnes of the day, there was not really that much action.

  2. Anon, yea the scenario played out very nicely. My bias was bullish. 1105-1107.50 area was annotated as "VPOC Cluster / Resistance" and that's where we saw the first rotation down. Overall, price action played out as anticipated.

    We also tagged and retraced off the 1115 level, which I mentioned and have had on the charts for a while now.

  3. Thanks for the wonderful effort that you put into the chart. I have played your levels for the past few days and I have to say that you are really onto something. Keep up the great work. I have us going to 1119 and then a move back to 1112 for further testing.

  4. Thanks Randi! Appreciate the kind words.


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