Monday, March 15, 2010

Monday 03/15/2010 - E-Mini S&P 500 Futures Review/Analysis

E-Mini S&P 500 Futures Review/Analysis
As I posted on Twitter, the plan for Monday morning was to Short the bounces into the Key Resistance Zones which worked out great. Price was unable to fill the gap off the open, and paused at the Initial Resistance Zone. It then went on to make a lower low. Initiating a Short on the retrace back up was the safer trade, IMO. Trade was better facilitated at lower prices right from the open. On the down move, Price quickly rejected 1136.50-1137.50 (Low Volume Area, 36.75 was my Bull/Bear Line in Sand), and began building value above 1137.50 for remainder of the day. We began seeing more aggressive buyers come in to the market after 2 PM (CT). The NYSE TICK provided some nice entries in the Key S/R Areas. I was talking to a friend earlier today about the benefits of doing your homework and identifying areas to do business, and one of the key benefits is that it keeps you from over trading and opening trades in the middle (chop) area. If you're a new trader and still learning to navigate the markets, you can significantly reduce your risk by simply initiating trades at the Key Levels. I personally use a 6 tick max stop-loss, but if you're new and need some more wiggle room, a 2-3 point stop would work fine as well. Use the Key Levels and fine-tune the entry using the NYSE TICK. Check the 2-minute ES/NYSE TICK chart below highlighting some Divergence setups (note: I use 1-minute ES/NYSE TICK chart in my trading). ES filled Friday's gap near the close. We closed on strength near the high of day, so price action is bullish going into tomorrow's FOMC Announcement, which could provide direction on the next swing.

ES/NYSE TICK 2-Min Chart

ES 5-Minute Chart

ES 30-Min Volume Profile Chart

ES Day Session Volume Profile Chart


  1. Emini-do you ever use the underlying up volume/down volume numbers on the tick charts? It's probably just a different interpretation of the DOM but I've noticed when they are overwhelmingly one-side while AT key areas, they help confirm a change in direction.
    Also, read some of your posts from 12 months ago on Don's site. You've made huge improvements!

  2. Hi Steve. I monitor volume mainly via the 30-minute and day session profile and just started using the 5-minute volume/market delta chart today which provides a very nice visual representation of volume at price within each 5-minute bar. I also keep an eye out for volume spikes on the 1-minute ES/NYSE TICK chart; those spikes are usually indicative of a possible reversal (perhaps this is what you're referring to??).

    And yes, I agree...I've made significant improvements over the last year but trading is a continuous learning process and I still have so much to learn. Thanks for the comment!


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