Monday, November 16, 2009

Key Levels (S&P 500 and Crude) for Tuesday 11/17/2009

E-Mini S&P 500
The scenario put together last night for Monday worked out beautifully in the ES today - No surprises. Going into tomorrow, traders may be looking for the 1103.25 level (last week's high) to hold, but I personally think that area hasn't solidified as strong Support just yet. What have we done at 1103.25? We hit it last week and pulled back to the 1082.50 level (20.75 pt pullback). We broke out above 1103.25 today. That's about all that 1103.25 has going for it. If price pulls back below it, moves back up, and goes on to make new highs, then I would say 1103.25 is solid. Until then, I wouldn't lean on it. 1096-1098 is the area I'll be watching for real support. I think price has danced around that area enough and I'm anticipating that area to hold. One important thing to keep in mind is, as traders, we're NOT in the Prediction business. I don't predict what will happen tomorrow. Hell, I don't know what will happen in the next 30 minutes. I just lay out a scenario (hypothesis), and if the market validates the hypothesis, I take action based on my trading plan. If the market chooses to ignore my hypothesis and do the complete opposite -- well, there's information to be gained from that as well. For example, if I'm anticipating 1096 to hold as support tomorrow, and price breaks below it on heavy selling, that is an indication of strong sellers and initiating a short on a pullback is a decent play at that point. Always be open to both directions. Having conviction in your market reads is one thing but saying "the market WILL do this" or "the market WILL do that" is plain wrong. The market doesn't have to do anything.

Side note: I have final exams next week and am really busy with school this week so I may take a break from posting levels on the Blog and Twitter.

ES - Daily Bar Chart with Volume Profile and Key Levels

ES - Weekly Bar Chart: We're coming up to the 50% retracement of the entire down move from 1590.25 so be extra careful if price reaches the 1122 level.

CL - Daily Bar Chart with Volume Profile and Key Levels

CL - Hourly Chart: Back to Upper End of Bearish Channel

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