Monday, January 31, 2011

E-Mini S&P 500 Futures Trade Plan for Monday 1/31/11

Notes for Sunday Night Session (posted Sunday before Globex Open)
We're working within the 1267.50-1299.50 Balance Area. A break below 1267.50 could bring additional liquidation, and could take price down to the 1257-1258 Area. Considering the market has been in an up-trend, ES could Balance in the 1267.50-1286.50 range. Sellers are in Control below 1286.50, which means greater edge on Short side below there.

Trade Plan for Monday 1/31
ES opened on weakness Sunday evening, and the break below 1267.50 resulted in a fast liquidation down to 1262.25. Responsive Buyers were active on the break and ES recovered more than 100% of the overnight down move, and is currently trading in the 1277 Area. We have Resistance at 1279.75-1281.75, and I'll be watching for Responsive Sellers there on first test with targets at 1275, and 1271.50 (Open Gap). I expect Responsive Buyers to be active on tests below 1268.50. We have Initial Resistance at 1284.75-1286.75, and I anticipate that Area to cap the upside. Price breaking above that Area could put Buyers back in Control. A break and hold below 1275 would confirm Sellers in Control. With the Chicago PMI due at 8:45 AM (released at 8:42 to Subscribers), we could get a choppy open. The expected Opening Type is an Open Auction In Range. Even if we break below 1267.50, my expectation is for a Balanced Session.

Econ Data
Personal Income and Outlays at 7:30 AM (CT), Chicago PMI at 8:45 AM (released to Subscribers at 8:42 AM CT), and Farm Prices at 2:00 PM (CT).

5-min Chart with the EMiniPlayer S/R Zones

Sunday, January 30, 2011

E-Mini S&P 500 Futures -- Balance Area Volume Profile

One of the metrics I keep track of is VPOC shifts from day to day, and a large VPOC shift typically provides edge in direction of the shift for the next few days. The VPOC on Thursday 1/27 was 1295.75, and it shifted down 23 points to 1272.75 on Friday 1/28. That being said, we still have to keep in mind that the market has been in an up-trend, and week over week, Value actually shifted higher. We have heavy Acceptance at 1270.50. The market may just consolidate within the 1267.50-1286.50 range for a few days until we get some real direction. A break below 1267.50 puts Sellers in Control. Good luck!

ES Volume Profile of the current Balance Area

Friday, January 28, 2011

E-Mini S&P 500 Futures Trade Plan for Friday 1/28/11

Notes for Overnight Session (posted Thursday night)
As I mentioned in last night's post, ES is trading near the top of the current Balance Area, and there's additional risk on the Long side. Market internals/breadth is mediocre and today was the lowest volume session of the year. The Russel (TF) has not participated in this break to new highs. We could be approaching an inflection point, and I'd rather be patient and let the Buyers confirm the breakout. A break below 1285 would be an early warning of Sellers taking Control.

Trade Plan for Friday 1/28
Selling in the overnight session shut off at 1290.25, within our 1288.50-1290.50 Support Zone and a tick ahead of the 1290 CHVN. ES made a new yearly high by 1 tick on the GDP release this morning, and Responsive Sellers sold into it. ES holding above 1295.50 opens the door for testing the 1300 Area. With Initial Resistance at 1303.25-1305.25, the upside is fairly limited on the day time-frame here. But we don't want to enter Short too early if ES is holding above 1295.50. Struggling to hold above 1296.75-1298, and breaking below 1295.50 would be a sign of weakness and we could get a pullback to Initial Support at 1289.25-1291.25. Below that Area, we have Support at 1284.75-1286.25 and I expect Responsive Buyers to be active there. The only economic catalyst during the day session is Consumer Sentiment at 8:55 AM (CT). We have an Open Gap at 1295.75, which could easily get tagged during the open. Following that econ release, the market may just consolidate within the recent range, or breakout and then consolidate in a range.

Econ Data
GDP & Employment Cost Index at 7:30 AM (CT), and Consumer Sentiment at 8:55 AM (CT).

Thursday's 5-min Chart with the EMiniPlayer S/R Zones

Thursday, January 27, 2011

Reviving the Public Blog

I'm thinking of reviving this Blog. If you used to follow this Blog, you know that I started a premium subscription service at back in April, 2010. I'm going to try sharing some of that content here and see how it goes. Based on the feedback and the time commitment involved, I'll decide whether to continue posting here. Every morning prior to the open, I post the Key Levels along with a Trade Plan for the day on the premium site. To kick start the revival of the blog, I'll start sharing the day's Trade Plan after the Close here on I believe traders will still find it useful and it will provide some insight on how I view the market.

Lets get this blog party started...

Trade Plan for Thursday 1/27/11
We have a Balanced overnight session, with Acceptance at 1292.75. We have Pre-Market Support at 1288.50-1290.50, and Pre-Market Resistance at 1295-1296.50. With the Durable Goods Orders and Jobless Claims out of the way, the next economic catalyst is the Pending Home Sales Index at 9:00 AM (CT). As I mentioned in last night's review post, ES is near the top of the Balance Area so there's higher risk on the Long side until we see some Initiative Buying above 1296.25. At the same time, the downside seems fairly limited in the day time-frame, and the Selling could shut off at the gap fill at 1287.50, or the 1285 Support Area. Since Buyers have been in Control, I'm anticipating a breakout and test of the 1300 Level, but I'm not a break-out trader so I will only get Long on a pullback into Support (broken resistance = support). I'll be watching for Responsive Sellers around the 1293.50-1294 Area; a fast break through that Area would confirm Buyers in Control.

Econ Data
Durable Goods Orders, Jobless Claims and Chicago Fed National Activity Index at 7:30 AM (CT), Pending Home Sales Index at 9:00 AM (CT), EIA Natural Gas Report at 9:30 AM (CT), 7-Yr Note Auction at 12:00 PM (CT), Fed Balance Sheet and Money Supply at 3:30 PM (CT).

Thursday's 5-min Chart with the EMiniPlayer S/R Zones

ES Volume Profile of the current Balance Area