MON - 11-15-2010 - (SUMMARY) Key 1206 resistance holds, and volume hints at a reversal at 13:00. Once 1202 breaks, expect 1193 low end of bracket to be tested, and look to take advantage of E=MC2 sell set ups along the way. Price works down to 1195 area to end the trading session and we monitor the 1206-1193 bracket going forward.
TUES - 11-16-2010 - (OVERNIGHT - OPEN) MACRO - ES is at the key big picture 1200 area of the 1200-1050 bracket. A breakout attempt higher last week is in the process of being 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 - Overnight price has moved steadily lower down to 1186.50 and a mechanical downtrend starts the trading session. E=MC2 always looks for signs for gap fade vs. gap continuation, and 60 min prior to the open a down gap fade scenario is unfolding in the 1190 area. Look for price to target the 1193 area which is then the key pivot point to watch within in the gap/first move/first retrace scenario relative to the macro views described above. Above 1193 could start a strong rally in line with the big picture. Below 1193 and we look for the price to move to 1180 to start.
TUES - 11-16-2010 - (OVERNIGHT - OPEN) OPEN UPDATE - After working higher to 1193 area before 8:30, just before the open the ES is in C2 gap sell continuation mode, so we start in sell mode, will watch for test of 1186 area to start, and see if volume leads the way to another fade the gap buy opportunity up to the 1193 area during the gap/first move phase.
TUES - 11-16-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - ES gaps down and makes a first move lower with sell opportunities to test 1186 area. The first retrace higher creates a fade the gap buy at 1187.50 (room to breakeven) as price moves higher to try to take out 1190. Day session part 2 starts with a down bias, and a potential conflict if the trading trend turns up past 1190 into 1193 resistance. Trade the short side until 1190 is taken out and should that happen key on activity near 1193 resistance above.
TUES - 11-16-2010 - (DAY SESSION PART 2) 10:00 am - Price as worked its way to 1180 as expected . We are in a trend day down. Look for passive E=MC2 trend day sell trades. If 1180 breaks 1165 is target with minor support at each 5 point interval. Maintain trend day down outlook until proven otherwise
TUES - 11-16-2010 - (SUMMARY) Trend day conditions offered good sell opportunities between 10:00 - 2:15 as price moved down to 1171, along with an aggressive volume lead countertrend buy opportunity near the end of the trading session. We now monitor the 1180-1165 bracket. mechanically price is in chop between 1178-1172 with a continuing down bias to 1165 until conditions change.
WED - 11-17-2010 - (OVERNIGHT - OPEN) MACRO - ES has seemingly "rejected" a breakout above the 1200-1050 bracket. This could mean an eventual move down to bracket lows near 1050 with 1120 first major pullback to swing support. The sign this is taking place is if the daily chart eventually makes a mew swing low after a pullback higher. The E=MC2 approach doesn't predict. It goes with unfolding flow with evolving expectations to place trade set ups in big picture context. OPEN - Overnight price remains in the 1180-1172 chop area that ended the trading session yesterday with the trading trend that is up as price tries to break above 1180. Above 1180 = move to 1193 pullback to swing resistance. Trading after a trend day often provides to be tricky as price likes to consolidate. Look for lows of trend day yesterday to be tested (1171) with room to run to 1180- 1165 consolidation low area. Therefore be on the lookout for 1180 resistance to hold, and then either volume to lead price down early with counter-trend setups, or the E=MC2 trading trend to turn down, and then look for sell opportunities lower. Any mechanical, or volume based long sets ups near the open are considered aggressive up against 1180 resistance, so be careful and be ready to exit quickly if no follow through higher develops.
WED - 11-17-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - ES gaps slightly up to 1180 area and makes a first move lower with sell opportunities to test 1180-1172 chop lows. The first retrace higher creates a set up a long trade within chop near 1177 to test the 1180-1172 highs. 1180 is taken out to the upside and the day session part 2 trading trend starts up as price moves back into the 1193-1180 bracket which means expectations are for a move to 1193 until proven otherwise. (i.e. - 1180 support area doesn't hold, which means price moves back into 1180-1172 chop which means the plan is to patiently wait for volume/chop pullback set ups as we wait to see if the E=MC2 trading trend realigns later in the session with an overall bias for price to move down to 1165 after a failure breakout attempt to move above the 1180-1165 consolidation high.
WED - 11-17-2010 - (DAY SESSION PART 2) MID DAY - Anyone trading ES today should see the difficulty as price is stuck in the key identified 1180 area. This is a perfect example of the way E=MC2 uses the big picture to filter trading conditions. Even though the mechanical trend is up from the open, we know this is all in the context of the key 1180 area, so it makes sense to be cautious. Price is coiling at a bracket edge which will make a breakout powerful when it occurs up or down. Take aggressive pullback/volume trades for now when they set up, and be quick to move to breakeven, or stop trading altogether, and eventually a breakout should provide a nice run up (1193) or down (1165) with good trade opportunities either way.
WED - 11-17-2010 - (SUMMARY) Price continued to chop in the 1180 area for most of the trading session and the eventual breakout to the downside was powerful enough to provide nice trading gains. There were only 3 E=MC2 set ups (price + volume) to consider during day session part 2- all Sells (1) 11:39 (breakeven sell trade ) (2) 14:00 (breakout sell trade) (2) 14:18 (continuation sell trade). Although price only reached 1174 after the breakout, today ended up a classic "inside pause day" after a trend day yesterday, and as long as 1180 resistance holds, expectation is for price to work to the low end of the 1180-1165 consolidation area.