WED - 12-22-2010 - (DAY SESSION PART 2) SUMMARY - Price trended steadily higher all morning till noon (up to 1254.75) providing gain opportunities for those holding long trades from early in the trading session. The first sign of responsive selling entered the picture just before 12:30 when a pullback lower was accompanied by a new volume extreme which signaled a C1-C counter-trend sell setup at 12:40 (1253.00) for scalp gains back to the 1251.50 pullback support area From here, the overall trend was still up, but a new volume extreme lower (sign of resistance above) coupled with slow trading cautioned to stand aside for the last hour of trading as price was not likely to swing to new intra-day highs with two big picture factors standing in the way. Just two trade opportunities today.
Didn't think the pullback from highs was a C1-C sell opportunity. Obviously not a gap fade or a failure test of the day's high...would this be simply a setup "after a long trend in place"?
Yes, watching price action the last two days was just trend like price action for back to back days ---with slow conditions in place etc.. At some point a consolidation or pullback will take place, and in this case the volume extreme breakdown (going back over two days, or a long continuous trend) was the sign to take a counter-trend trade (if you wanted to) after a long trend was in place...
THURS - 12-23-2010 (OVERNIGHT-OPEN) MACRO â On the daily charts, the ES has broken out of the 1200-1050 bracket on the way to the 1280 area. Currently price is in an uptrend with a newly formed 1255 resistance area. If price moves below 1251 it will confirm a 1255-1245 consolidation area to monitor, with a bottom cushion to 1242 support. If 1242 is taken out then price moves back into the 1242-1230 consolidation. OPEN - Overnight price has moved lower to the 1251 area. Mechanical trend is still up until 1251 breaks. If a price/volume sell develops first, look for a break of overnight lows, and then a move to 1245 area if continuation develops. If a price/volume buy develops first, 1255 area is the first target. Monitor structure after Day session part 1 completes for daily bias with a likely 1255-1245 consolidation area forming after a two day run up.
THURS - 12-23-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - If you were very aggressive a price/volume sell may have been entered at 1252.25 shortly after the open in a mechanical C3 buy condition. Expectations were for a penetration of overnight lows at 1251.50 to lead the first move of the day lower. Instead a small loss developed when price made a first move of the day higher. Price then retraced lower to break intra-day/ overnight lows in the 1252 area but didn't immediately follow through lower, so while the start of the day bias is down, price is in 1255-1251 chop until 1251 breaks. Trade with a down bias for now and be careful if 1250 area holds. If any sharp rally develops then chop is confirmed, and there will likely be no real trade opportunities today if price action remains slow.
THURS - 12-23-2010 - (DAY SESSION PART 2) SUMMARY - Until intra-day volatility re-establishes itself it has been clear for many days now that the best trading opportunities are big picture based, and require patience. Price movement relative to support-resistance hasn't changed . The pace and rhythm of price action has simply slowed down which means you need to adjust your style of trading a bit. With a down bias after the start of trading, the only real trading opportunity today was to enter a short trade, stick with the down bias, and then look to exit when price broke lower to the expected 1250 area. In other words, take small gains in a slow environment when they are offered, and just try to meet daily trading goals. Although the short trade today took some time to provide gains, it all fit within big picture expectations and unfolding intra-day structure. The market couldn't follow thru below 1250, so after the drop there was nothing to do for the rest of the session as price moved back up inside 1255-1250. Going forward, until volatility picks up, there will just be very few trades each day, and each trade will need to be managed patiently in line with the big picture.
MON - 12-27-2010 (OVERNIGHT-OPEN) MACRO â On the daily charts, the ES has broken out of the 1200-1050 bracket on the way to the 1280 area. Currently price is in an uptrend with a newly formed 1255 resistance area. If price holds below 1251 it will sign a move to 1242 support. If 1242 is taken out then price moves back into the 1242-1230 consolidation. OPEN - Overnight price has moved lower below the 1251 area. The bias starts down as long as the 1251 area holds. If price starts higher, watch the 1251 area closely for acceptance to turn the bias up, or rejection which could start the first retrace area down. Holding below 1251 signals a move to overnight lows to 1245 to start, and then to 1242 support.
MON - 12-27-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - The first part of the trading session moved up slowly and resulted in up bias structure to 1251 resistance to create big picture conflict. This means hold off on long trades until 1251 area is taken out, and go with big picture flow to downside after a new swing low, and/or a price/volume/pivot C3 sell which will take time to form. Add to that a continued slow trading environment, and this is really just an overall waiting period for volatility to get back to normal levels, while looking for perhaps a good setup or two to patiently trade in line with the big picture should it form...
MON - 12-27-2010 - (DAY SESSION PART 2) SUMMARY - Price hovered around 1251 resistance most of the morning. When price started higher above 1251 near noon, the up bias since the open aligned with the big picture, and the safest trade opportunity of the day was to buy near 1251.50 which offered small gains as price worked its way to the top of 1255-1251consolidation.
TUES - 12-28-2010 (OVERNIGHT-OPEN) MACRO â On the daily charts, the ES has broken out of the 1200-1050 bracket on the way to the 1280 area. Currently price is in an uptrend with 1255 resistance and 1250 support. If price moves below 1250 it will signal a move to 1242 daily pullback to swing support. If 1242 is taken out then price should move to the 1230 pullback area. OPEN - Overnight price has moved higher above 1255 and we will monitor for acceptance or rejection of this level during the first part of the trading session. Rejection will be confirmed with price/volume/pivot sell structure that moves price below the overnight lows of 1253. Until then an up bias is in place and price will either continue higher towards1280, or consolidate in the 1255 area with an up bias to start, before deciding which way to go later in the session.