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

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