Wednesday, December 9, 2009

Key Levels & Scenarios (S&P 500) for Thursday 12/10/2009

E-Mini S&P 500 (December Contract)
The levels haven't really changed much, so please refer to yesterday's Key Levels chart.

1099.75-1101.25 is still the initial resistance zone (good chance to tag it in Globex), with 1105.50-1108 as strong resistance above that area. After that, 1110 is the 100% range extension, which may also act as a temporary barrier to further upside.

On the down side, the initial support zone is 1091.25-1092.50, followed by 1085 and 1082.50. The support zones haven't really changed much.

Today's VPOC was around 1092.50, and we closed on the highs so my near-term bias is bullish. International Trade and Jobless Claims data out at 7:30 am cst tomorrow morning. I'm anticipating a trend day with some conviction on direction. The plan is to be patient, identify the trend, and then enter in direction of trend on pullbacks. Even if the trend is up, taking short trades in the 1107-1110 area is a relatively safe bet. On the other hand, if the trend is down, I'd be cautious entering Long (counter-trend) at initial support (1091.25-1092.50) but anticipate a bounce in the 1082.50-1085 area. It's also contract rollover tomorrow, and volume will gradually shift from the December 2009 contract (ESZ09) to the March 2010 contract (ESH10) over the next couple of days. The support/resistance numbers I've mentioned above are for the December contract.


  1. Thank you for the post...the 1085 bounce which you suggested today played off very well. Could you please share how you arrive at these critical levels. I have seen your exhaustive reading list and was wondering if you could recommend a book to study a similar trading methodology to yours.
    I appreciate your input and follow your blog religiously. I'm hoping to start trading live again in the next 3 months and your blog has really helped me tremendously. Thanks adain.

  2. Spot on !! I stumbled upon your website 2 weeks ago and have been following the key levels closely and it really has reduced my tension level drastically AND helped me make HIGH PROBABILITY TRADES. I've made a few 3-5 point gains in my papertrades using the key levels. THANK YOU SO VERY MUCH FOR PUTTING A BLOG DAILY INSPITE YOUR BUSY SCHEDULE. I am eagerly awaiting the blog on how you arrive at the key levels. Do you by any chance use the floor traders pivot levels?

  3. MaeRae, I'm glad to hear that my posts have helped your trading - knowing that makes it worthwhile to post the levels and scenarios. I do not use the Floor Pivots. Schedule is pretty packed right now but I'll try to get to explaining the key levels later this month.

    Charlotte, I would highly recommend the following:
    Mind Over Markets
    Reminiscences of a Stock Operator
    Enhancing Trader Performance

    After you've read the above, pick up Reading Price Charts Bar by Bar. It's not an easy read, but it's a good resource if you want to understand pure price action.

  4. Thank you for the book suggestions...Look foward to your blog and your explanation regarding the key levels.

  5. No problem Charlotte. The post explaining the key levels might be a little while, but I'll try to get to it sometime in December.

    I'm even throwing around the idea of doing a Live webinar sharing my charts and the process I follow; but just for the small group of readers of the Blog. If I decide to go with the webinar, only people who read the Blog regularly will be invited and the group will be kept pretty small. I'm not a professional educator/mentor or public speaker so want to keep it low key.

  6. Hi Eminiplayer

    I would also be very interested in your webinar. I have been following your blog for the past couple of weeks and have tried to understand how you determine your key levels. It helps a lot to read you every day but it would help even more if you could explain a few more things so that we could make it a true learning experience.
    Thank you for all you do and keep up the good work.
    Happy trading!


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