FRI - 12-29-2010 - (DAY SESSION PART 2) SUMMARY - Price moved down to test the bottom of 1255-1250 early, held on, and then worked its way to the top of the 1255-1250 range. Beyond an opening sell followed by an opening buy, the only other trade opportunity was to buy at 1253.50 near 10:30 as an aggressive mechanical counter-trend trade for a small gain up to the 1255 area. Once 1255 was reached, the mechanical trading trend was unclear (C3 sell with an up intra-day up bias) all inside 1255-1250, so there were really no clear opportunities for the rest of the trading session. Hopefully volatility returns to normal on Monday.
MON - 01-03-2011 (OVERNIGHT-OPEN) MACRO â The ES has broken out of the 1200-1050 bracket on the way to the 1280 area. After pausing inside 1255-1250 consolidation for 7 trading sessions to end 2010, price is gapping higher this morning and we will look for acceptance or rejection of the breakout attempt higher as Day Session Part 1 structure unfolds. The big picture trend remains up until 1255 is taken out. OPEN/DAY SESSION PART 1 - Overnight price has moved steadily higher to reach 1264. Fade the gap setups target the 1258 area, and the big picture trend remains up until 1255 is taken out, so monitor for a turnaround higher later if this occurs. A continuation move higher at the open will still have plenty of room to pullback, and remain in a big picture uptrend, either with intra-day structure confirmation or conflict. 1262 looks to be the key early pivot area to monitor as either a price/volume fade or continuation starts the first move of the day
MON - 01-03-2011 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - A price volume continuation buy developed at 8:39 (1264.25) for gains as price made its first move of the day higher reaching 1269.25. With the Dow up over 100 points , advance/ decline line holding in the 1600 area we have trend day conditions in place, so monitor for continued one direction 5-minute price flow, and look to buy on deep trend day pullback areas as they develop with expected moves to new intra-day highs. If the trend day up is to fail it will either be with a new mechanical trend down that also breaks key support (which for now is the 1265 level), or after failure swings at intra-day highs followed by a breakdown below a intra-day support level in place (which will evolve as session moves on). Each scenario will take time to develop.
MON - 1-03-2011 - (DAY SESSION PART 2) SUMMARY - As the trend day up continued higher from the open, the first trading pullbacks were to rolling pivot areas as you watched and reacted to the flow of big picture intra-day price structure and price action. Four long setups developed - Three gains to new intra-day highs and One 1-tick loss (9:05@1266.75, 9:34 @1268.50, 10:18 @1270.25, 10:58 @1271.00). A deeper pullback developed starting at 11:55 which allowed you to patiently monitor for a deep pullback trend day entry long which first formed at 12: 42@1270.75 (rolling pivot, volume confirmed) for an expected move to new highs at 1272.75. This trade was stopped out for as small loss below pivot lows. Price continued to pullback further with new swing lows which made analysis tricky - a new mechanical downtrend within the context of trend day up conditions (price holding 50% pullback on session), but with a of "trading range till end of day" mentality. This lead to one of two options for the rest of the session --A sell at 14:00 for small gains with new mechanical trend down, or a big picture (trend day/trading range) context counter-trend buy at 14:45 (small gains or B/E) with time running out in the trading session.
TUES - 01-04-2011 (OVERNIGHT-OPEN) MACRO â The ES has broken out of the 1200-1050 bracket on the way to the 1280 area. After pausing inside 1258-1250 consolidation for 7 trading sessions to end 2010, price gapped higher yesterday and started a trend up that met responsive selling in the 1270 area, so we now monitor the 1270-1258 bracket. OVERNIGHT/OPEN - Overnight price moved up to 1270 and structure remains in a sell condition until 1270 can be taken out. If a price/volume buy opens the session watch 1270 resistance carefully, otherwise expect overnight lows near 1264 to be tested, followed by 1258 if 1264 support breaks.
TUES - 01-04-2011 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - Price moved right to 1270 resistance at the open, and a price/volume/pivot sell developed shortly thereafter at 1268.50 to provide nice gains as price made the first move of the day lower to test the 1264 overnight lows. As price moved to 1264 the trading trend (extended from yesterday) has the look of developing 1270-1264 chop. Chop will be confirmed if 1267 is taken out to the upside during any retrace, in which case take price/volume chop trades that develop after highs or lows are tested. As long as 1267 holds trend is down to 1258 area target (look for sell trades and possible countertrend trades later if price reaches target). Look for long trades only if intraday structure turns up later in the session with a new swing high (look for volume confirmation, etc.).
TUES - 1-04-2011 - (DAY SESSION PART 2) MIDDAY- This has been a classic E=MC2 trading day where everything has been in sync. Price moved lower from 1270 to 1258 as expected creating a host of sell setups and opportunities along the way. A countertrend long setup then developed after price reached 1258 for gains back to the logical big picture pullback area near 1262. With downside target reached, not quite a new intra-day bias yet, and FOMC minutes released soon, best to stand aside for now until after announcement and see if a new up bias can form off bracket lows. Any future sells setups should have room to test lows as lower target has been reached.
TUES - 1-04-2011 - (DAY SESSION PART 2) SUMMARY - After the FOMC minutes, the market moved higher to turn the intra-day bias up at 13:05- confirming the lows of the 1270-1258 bracket. Long trades opportunities developed at 13:07 (small gains -first entry after a trend change) 13:40 (small loss when pivot lows were taken out) 14:22 (small gains) 14:49 (small gains). Overall a straightforward day of trading when referenced inside the big picture of the 1270-1258 bracket.
WED - 01-05-2011 (OVERNIGHT-OPEN) MACRO â The ES has broken out of the 1200-1050 bracket on the way to the 1280 area. After pausing inside 1258-1250 consolidation for 7 trading sessions to end 2010, price gapped higher and met responsive selling in the 1270 area, so we now monitor the 1270-1258 bracket. OVERNIGHT/OPEN - Overnight price tested the 1258 lows again, and bounced higher to turn the mechanical trend down with conflict because 1258 is potential strong support, and a second test and hold of 1258 should mean price is heading back up to 1270 with 1266 first resistance. Therefore, look to first move /first retrace structure as a guide. If price/volume starts lower at the open to the 1260 area be ready for a counter-trend price/volume long if 1260 area holds. If price starts up at the open 1266 is first target, and see if any reversal can take out intra-day lows which will turn intra-day structure bias down in line with the mechanical bias to start the trading session (could also mean 1266-1260 chop with a down bias depending how price action unfolds).
WED - 01-05-2011 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - Price gapped slightly lower and after a few minutes started its first move of the day higher to 1266. Price action rolling pivot buy opportunities developed at 8:40. and 9:04 as price worked its way higher to 1266. The intra-day bias is up and as long as 1263 holds price should work its way higher to 1270. If price breaks 1263 look for 1266-1260 chop to form.