Wednesday, February 9, 2011

E-Mini S&P 500 Futures Trade Plan for Wed. 2/9/11

Notes for Overnight Session (posted Tuesday evening)
In the overnight session, we have Support at 1315.25, followed by 1312.25-1313.25. We're working within the 1310-1322.25 developing Balance Area, with the Balance Area VPOC of 1318.25.

Trade Plan for Wednesday 2/9
ES has been trending lower in the overnight session, but has managed to hold above the 1315.25 Support and built Acceptance at 1317. We're working within the 1310-1322.25 developing Balance Area, with the Balance Area VPOC at 1318.25. The overnight Low at 1316 coincides with yesterday's Value Area Low. We want to see if prices below 1316 bring in additional Sellers or Responsive Buyers. On the upside, we want to see if prices above 1320 bring in additional Buyers or Responsive Sellers. We have an open gap at 1321.75, and will likely see Responsive Sellers active on the first test of 1321-1322. A break & hold below 1316 could take us down to 1310, or even to the open gap at 1307.25, where I expect Responsive Buyers to be active. Bigger picture, Buyers are in Control, so I expect the first push below 1310 to get bought pretty aggressively. Given the overall Bullish context, if we break below 1310, my focus will be on the Long side at the Support Zones. On the upside, a break & hold above 1320 could take us to the 1326 area, followed by 1329-1331. The expectation is for Responsive Sellers to be active at 1329-1331, so it's a good place to exit Longs or enter Short. The bias heading into the day is neutral to slightly bearish.

Econ Data
MBA Purchase Applications at 6:00 AM (CT), EIA Petroleum Status Report at 9:30 AM (CT), and 10-Yr Note Auction at 12:00 PM (CT). Federal Reserve Chairman Ben Bernanke testifies before House Budget Committee on economic, employment and budget issues in Washington at 9:00 AM (CT).

5-min Chart with the EMiniPlayer S/R Zones

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