Thursday, December 3, 2009

Key Levels and Scenarios (S&P 500) for Friday 12/04/2009

E-Mini S&P 500
Since I was busy with technology work tonight, I wasn't planning on posting the levels/scenarios, but I saw Charlotte's comment and decided to post some thoughts for tomorrow. First thing to keep in mind is that Non-Farm Payroll data comes out tomorrow morning at 7:30 AM (cst) and it is a market moving event! The last NFP release produced a quick 15 point swing down followed by a 15-16 pt swing up, so do NOT fight the momentum and enter your trades at Key Levels off the reaction. If you're a newer trader, it's probably best to just lay out some scenarios and watch from the side lines. Let the initial balance (first hour of trading) develop and then enter the market based on where price is in relation to the First Hour High/Low (Initial Balance) and the Mid-Point. Use the Mid-Point as your Line in the Sand -- Long bias above it, Short bias below it. My bias at the moment is bullish!

We're currently building value above 1096 in the over night session, and I'd like to see price remain above 1094.50 over night for some bullish action in the morning. With the NFP release, price could push hard in either direction and then do a complete 180 and head the other way. I have no clue which way it will move! On the positive side, I don't need to know which way it will move.

Bullish Scenario (above 1091)
1091-1092 area is the initial area of support, and under normal market conditions I would anticipate a bounce on first touch, BUT with the NFP release in the morning, price could easily slice right through it and head to the 1085 area. Even with the expected increase in volatility, I am anticipating a bounce in the 1082.50-1085 support zone. On the up side, the areas that held as support may now act as resistance. Anticipating initial resistance at 1103.25, but again, if we get a positive response to NFP, price could easily push right through to 1108 or even 1111. I am anticipating the 1110-1111 area to provide a 3-4 point retracement on first touch so it's a good place to scale out of Longs. Beyond 1111, we have 1115.50, then 1119 and finally that big 1122 level! Is it possible to tag 1122 tomorrow? Yes! Anything's possible in the market. I never close myself off to where price could go.

Bearish Scenario (below 1089)
1089.25 is previous week's mid-point and close. The levels below 1089 are pretty well defined. We have 1082.50-1085 as support. I would definitely scale out of Shorts in that area since a bounce is likely. If we break 1082.50, we have 1076.50, followed by 1071.75, 1067 and finally 1063.75.

Good night, and good luck tomorrow!

ES - Daily Bar Chart with Volume Profile and Key Levels


  1. I am a newbie to your blog and wanted to know if anyone on here can help as far as learning how to trade the Eminis... I think your blog is an excellent source of education and really enjoy it.

    Thanks for all the help!

  2. Do you read the commitment of traders report? Do you know what it is?

  3. Thats awesome. thank you for posting this. Your senarios have played out perfectly this morning..Much thanks again..

  4. Anon, glad you're finding the info useful. Just go through the Blog and you'll have enough ideas to work with.

    David, I know what it is, but at the moment, I do not read the COT report.

    Charlotte, no problem. Hope you banked some $$$ this morning.

  5. We're seeing similar movement to last month's NFP release; big swing in one direction followed by an equally large swing in the other direction.


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