I want to post a running diary of the ES market that is used to trade the ES market with the E=MC2 Trading Approach. If you currently trade with E=MC2, this diary will help serve to re-enforce key E=MC2 principles much like having an E=MC2 trading coach sitting next to you as you trade each day. If you trade without E=MC2, this diary can be of benefit with respect to highlighting developing ES big picture structure to help provide context for your trading decisions. The best E=MC2 trade opportunities each day are presented. The information in this diary guides my own ES trading each day, and I believe anyone interested in trading the ES can benefit from this information as well as all the information presented in the E=MC2 material- where the premise is show how to take a consistent framework day after day, place the framework under the umbrella of big picture context, and then look to succeed at trading with realistic trading goals and expectations. My aim is to provide interested traders trading concepts that I have found to be valuable over my many years of trading the ES. I appreciate all the positive feedback I have received from traders who have found E=MC2 information to be a helpful addition to their trading efforts, and I only wish everyone the best in their trading, no matter what their trading style, or no matter what trading approach they use....
MON - 11-08-2010 ES BIG PICTURE - 11/04 trend day up gaps above big picture 1200-1050 bracket setting path to new big picture 1280 high if price continuation can develop above 1223. Price currently sits inside 1223-1216 consolidation pause area. If 1216 breaks to the downside, look for move down to first support at 1212, and then to 1200 pullback to swing support area. DAY SESSION PART 1 - (START) 1218.25 (OVENIGHT) - Test of 1216 consolidation low. Watch for 1216 to hold, or not. (GAP/FIRST MOVE/RETRACE) - Gap down, Gap continuation sell (C2) to 1216 area. First retrace to C3 sell area holds 5-min downtrend. First move/First retrace starts intra-day bias down. Monitor for key 1216 support to hold. Day session 1 E=MC2 opportunities - Sell 8:44 (C2) Sell 9:57 (C3) DAY SESSION PART 2 - 1216 support area tested/rejected. Volume at 10:38 confirms strong 1216 support and signals move back to 1223 consolidation high until proven otherwise. Day Session 2 E=MC2 opportunities - Buy 10:25,10:53 (C1-C) Buy 11:18, 12:01 (C1) Buy 13:05,14:17 (C2) SUMMARY - Price spends second overlapping day inside 1223-1216 consolidation after breakout above the 1200-1050 major bracket two days ago. Price tested 1216 lows early, and when 1216 held with a volume reversal, several E=MC2 buy opportunities developed as price now heads higher towards the top of the range near 1223.
TUES - 11-09-2010 ES BIG PICTURE - 11/04 trend day up gaps above big picture 1200-1050 bracket setting path to new big picture 1280 high if price continuation can develop above 1223. Price currently sits inside 1223-1216 consolidation pause area "two days in a row." If 1216 breaks to the downside, look for move down to first support at 1212, and then to 1200 pullback to swing area support. DAY SESSION PART 1 - (START) 1223.00 (OVENIGHT) - Prices tests 1223-1216 consolidation low and then moves all the way up to 1223 high to start session in a C2 uptrend. Watch to see if price can break above 1223, or not. (GAP/FIRST MOVE/RETRACE) - Gap up, Gap fade sell (C1-C) to first pullback 1219 area. First retrace moves back up past opening highs right to key resistance area at 1223 to start an intra-day bias up with caution. Monitor key 1223 resistance area for breakout, or failure. Day session 1 E=MC2 opportunities - Sell 8:34 (C1-C) Buy 9:09 (C1) DAY SESSION PART 2 - Price fails to break above 1223 area and sets the stage for a down bias for the rest of the trading session, starting with a counter-trend sell setup after a failure at key resistance. Look for move to down 1216 consolidation low (which coincides with overnight lows). After 1216 is taken out, look for 1212, and after 1212 is taken out, there is room to run to the 1206 gap area during what is now a clear pullback to big picture 1200 area swing support. Day Session 2 E=MC2 opportunities - Sell 9:33 (C1-C) Sell 10:20, 10:50, 11:20 (C1) Sell 12:20 (C2) Sell 12:37 (C1) Buy 13:05 (C1-C) Sell 14:01 (C3) Sell 14:19, 14:29, 14:36, 14:41, 14:46 (C1) Buy 14:55 (C1-C) SUMMARY - Price moves up and fails at 1223 consolidation highs which sets the stage for move lower to 1216 consolidation lows. The mechanical E=MC2 trend remains in a down bias most of the trading session, and price gets as low as 1206. Price is now in the process of testing big picture 1200 pullback to swing support with first pullback swing resistance in the 1212 area, followed by even stronger resistance in the 1216 area. For now trading looks like it has strong support/ resistance between 1216-1200.
WED - 11-10-2010 ES BIG PICTURE - 11/04 trend day up gaps above big picture 1200-1050 bracket setting path to new big picture 1280 high if price continuation can develop above 1223. After the 1200 breakout, price pauses for two days inside 1223-1216 consolidation, and then breaks to the downside. Price now sits between 1216-1200 (short-term pullback to swing resistance and big picture pullback to bracket high support), with an overall up bias as long as the 1200 area holds on a continued pullback. DAY SESSION PART 1 - (START) 1212.00 (OVENIGHT) - Price forms a tight 1214-1208 range, and price sits in overall C3 chop including yesterday's price action. Monitor 1216-1206 range to start the trading session (GAP/FIRST MOVE/RETRACE) - No Gap, C3 Sell starts first move of day down to overnight/yesterday's lows near 1208/1206 area and then to key 1200 area. First retrace moves up 50% of first move to 1206 resistance which must hold to maintain a down bias for the trading session. Day session 1 E=MC2 opportunities - Sell 8:32 (C3) Sell 8:48, 8:55, 9:04 (C1) DAY SESSION PART 2 - Price rallies strongly off big picture 1200 support to 1206 area on heavy volume, which dampens excitement for C2 sells to reach new intra-day lows. Price holds the in the 1206 area for about an hour (9:30-10:30) which shifts the E=MC2 trading bias up with expectations for price to move back up to top of 1216-1206 high after price reenters the 1216-1206 consolidation area. Day Session 2 E=MC2 opportunities - Buy 10:20 (C2) Buy 10:46 (C1) Buy 12:08 (C3) Buy 12:56 (C2) SUMMARY - Yesterday started a pullback that would likely test the key 1200 area. Early E=MC2 sell trades today captured this move. When price rallied strongly from the 1200 lows, and then broke back into the 1216-1206 consolidation area, the double strength of "big picture support and price re-entering the 1216-1206 consolidation area set the path for many nice long E=MC2 trades back up to 1216.
THURS - 11-11-2010 ES BIG PICTURE - Price gaps up above big picture 1200-1050 bracket setting path to new big picture 1280 once continuation develops above 1223. After 1200 breakout price pulled back to test the 1200 pullback to swing support area. Price now sits inside 1216-1206 consolidation, with an overall up bias as long as the 1200 area holds on any further pullback. DAY SESSION PART 1 - (START) 1206.00 (OVENIGHT) - Price moves lower from 1216 all the way to 1206 to set an E=MC2 down trading trend to start. Monitor 1216-1206 early to see if range low holds, or not. (GAP/FIRST MOVE/RETRACE) - Gap down. C1 sell opportunities start first move of day down below 1206 and we monitor for acceptance, or rejection. First retrace creates a C1-C buy opportunity 30 minutes into the trading session as moves price back up into the 1216-1206 range, past intra-day highs, and sets an up bias to start the trading session off consolidation lows. Expecting a move back up to 1216 until proven otherwise. Day session 1 E=MC2 opportunities - Sell 8:30, 8:36, 8:40 (C1) Buy 9:07, 9:15 (C1-C) DAY SESSION PART 2 - Price moves up to 1209.50 and then pulls back to 1206 area. If 1206 area holds we expect price to work its way to 1216-1206 high. The mechanical E=MC2 trading trend shows "chop" after the first move/first retrace, but we maintain a big picture up bias (5-minute trend, plus move back into 1216-1206 consolidation area) as long as 1206 area holds. Looking to see if price can move above 1209.50 on the way to 1216 area. Day Session 2 E=MC2 opportunities - Buy 10:45 (C3 CHOP) Buy 12:12 (C2) Buy 12:37, 13:07 (C1) Buy 14:45 (C3) SUMMARY - After a big picture pullback yesterday that tested the key 1200 area, price rebounded strongly and moved to the top of the 1216-1206 consolidation area. Today, overnight price worked its way back down to 1216-1206 lows, but failed to continue lower in early trading, which signaled a move back up to 1216 highs. Price is entering third day inside 1216-1206 consolidation, and breakout attempts/failures from this area will guide trading going forward.
FRI - 11-12-2010 ES BIG PICTURE - Price holding above big picture 1200-1050 bracket setting path to new big picture 1280 high if price continuation can move past 1223. After gap breakout above 1200 price pulled back to test the 1200 pullback to swing support area. Price now sits inside 1216-1206 consolidation with an overall up bias as long as the 1200 area holds on any further pullback. DAY SESSION PART 1 - (START) 1203.00 (OVENIGHT) - Price moves lower below 1216-1206 range all the way down to 1193 which is the true pullback to swing support for the 1200 bracket high based on highs made during the first three days of November. Price rebounds strongly from 1193 all the way back to 1206 which is pullback resistance based on the 1216-1206 consolidation area. Monitor open to see if price can move back above 1206, or instead trade between 1206-1193. (GAP/FIRST MOVE/RETRACE) - Gap down at open but price is rolling over to an E=MC2 mechanical uptrend. Therefore, watch for first move up, and know you are still in a big picture downtrend on the 5-minute chart, which means to watch for trading trend to roll over to the downside in line with the big picture. The key will acceptance/rejection of the 1206 area. Price first moves up to 1208 area (pullback to swing resistance from yesterdays price action, and the first retrace then moves price below intraday lows at 1202 to create a down bias for the start of the trading session. Day session 1 E=MC2 opportunities - Buy 8:43, 8:50, 8:57 (C1) Buy 9:15 (C2) DAY SESSION PART 2 - Price attempts to move above 1206 early but this move is rejected at 9:30 when price makes new intra-day lows, creating a powerful down confluence of first move-first retrace activity- 1. 5-minute down trend that pulled back to resistance and rolled over 2. Rejection higher into 1216-1206 bracket 3. E=MC2 mechanical trend turns down, all at the same time. Expect move to 1193 overnight lows until proven otherwise. After 1193 key support is reached a major triple volume divergence swing lower takes place signaling a counter-trend move higher. Price cannot test intra-day lows again, and the E=MC2 trading trend turns up to end the session. Day Session 2 E=MC2 opportunities - Sell 9:35 (C1) Sell 9:52 (C2) Sell 9:59 (C1) Sell 10:49 (C3) Sell 11:01, 11:28 (C1) Sell 11:40 (C2) Sell 11:54 (C1) Buy 12:14, 12:24 (C1-C) Sell 12:48 (C3) Buy 14:01, 14:16 (C1) SUMMARY - Overnight price moves substantially lower below 1200 to actual 1193 big picture support, and then rallies strongly higher above 1200 to start the trading session. The 5-minute trend starts in a downtrend from yesterday as E=MC2 watches the first move/first retrace in the context of the big picture as always, which is represented by two consolidation areas 1216-1206, and 1206-1193 at the start of trading. Price fails to move higher into the 1216-1206 bracket which sets the stage to move to the lower edge of 1206-1193 bracket. From here price rebounds as expected and ends the session in the big picture 1200 pullback area to start next week. If 1200 area holds, price should retest 1223. If 1200 area fails, it could signal a major big picture rejection of breakout attmept higher.
MON - 11-15-2010 - (OVERNIGHT - OPEN) MACRO - ES is at the key big picture 1200 area of the 1200-1050 bracket. A breakout attempt higher last week is going to accepted or rejected. Accepted = 1280 target with 1223 first resistance. Rejection = 1050 target until proven otherwise. The E=MC2 approach doesn't predict. It goes with unfolding flow with expectations to place trade set ups in context. OPEN - Uptrend starts trading session right to 1202 pullback to swing resistance. Start with long trades, and key on 1202 being taken out to upside as first sign that price is holding above 1200-1050 big picture bracket. Above 1202= 1210 to start. If 1202 fails early and volume leads the way lower, look for sell ups for move down to 1195 area. After first hour, analyze how gap/first move/first retrace sets an up or down bias to start the trading session relative to these levels.
MON - 11-15-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - ES gapped higher at 1201 and moved up to test 1202 resistance area. Resistance held, and volume lead the way to first move of the day down with fade the gap sell opportunities to 1195 area. Fade the gap first move moved down to 1197 and "did not" turn mechanical trading down as the move down was a pullback in a short-term uptrend resulting from the gap up, and the first retrace from 1197 takes price back up to 1202 resistance area. Day session part 2 starts in E=MC2 in "chop" between 1203-1197. Look for volume pullback trade sets ups inside chop (up or down) and wait for the trading trend to better align later in the trading session for directional trade opportunities..
MON - 11-15-2010 - (DAY SESSION PART 2) MID-DAY - A long trade setup at 10:30 at 1201 presents the first inside chop trade set up that moves price up to key 1206 resistance which turns the trading trend up. As long as price holds 1202 area on a pullback uptrend remains intact. 1206 area is the key. A break above 1206 takes price back inside the 1216-1206 bracket for a move to 1216. If 1206 resistance holds, and 1202 breaks, a move to 1206-1193 bracket low is expected.