TUES - 11-30-2010 (OVERNIGHT - OPEN) MACRO - On the daily charts, price will either break above 1200, and this should mean price was rejected moving back into the daily 1200-1050 bracket and is heading much higher, or it will swing below 1171 and start the move 1120. The short term consolidation areas to monitor inside 1200-1171 are 1200-1188, 1188-1180, and 1180-1175. OPEN - Price seemed to reject the bottom of the 1200-1171 yesterday, breaking higher out of intra-day chop, but overnight price has moves back down to the bottom of this range again. A nice pre-open price/volume sell developed at 7:00 around 1181. The key level within this range seems to be 1180 area, so the plan is to focus on the mechanical trend (down to start) in relation to the 1180 pullback area. From here we will see where first move/first retrace intra-day structure bias ends up relative to the key 1175-1171 support area.
TUES - 11-30-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - ES gapped down and offered an early price/ volume sell to test the overnight lows in the key 1175-1171 support area (take quick profits), followed by a price/volume counter-trend longs at 8:45, 8:55 to move up to the expected 1180 area as expected and start the first move of the day higher to key resistance. Just like yesterday the mechanical trend is turning up right at key resistance (1180). Since this is early in the day, maintain an up trading bias as long a volume holds up and price holds the first retrace 1176-1175 area. If 1180 is taken out, look for run up to 1188. If 1175 breaks to the downside beware of chop forming in the key support 1175 area, but you can aggressively trade with a down bias to start in case 1171 breaks.
You may be right, especailly if price holds below 1180, however the mechanical trend I follow doesnt turn down unitl 1176 area is reached, so I won't be looking for shorts until then...
TUES - 11-30-2010 - (DAY SESSION PART 2) SUMMARY - At 10:00 price makes deep C3 buy pullback to the key 1180 area. First move-first retrace analysis maintains a long bias in what turns into a intra-day chop area, and the first price-volume long entry during chop develops in the 1180 area around 10:52. Price moves to 1182 for either small gains or a break even trade if you were holding for new intra-day highs above 1184. The next long entry develops at 1182 around noon which does move to new intra-day highs as expected (1184) on the way to the 1188 area. At 13:30 the mechanical trend turns down when price drops right to key 1180 support (be careful of immediate new shorts, etc.), and this results in a pullback within the 1188-1180 trading range before price moves lower to end the trading session.
WED - 12-01-2010 (OVERNIGHT - OPEN) MACRO - On the daily charts, price will either break above 1200, and this should mean price was rejected moving back into the daily 1200-1050 bracket and is heading much higher, or it will swing below 1171 and start the move 1120. The short term consolidation areas to monitor inside 1200-1171 are 1200-1188, 1188-1180, and 1180-1175. OPEN - Strong Gap higher as price moved from lower to upper end of 1200-1171 range overnight. Wide overnight ranges can be tricky to trade, as early trade setups have a hard time following through with any momentum, and the intra-day structure that forms has to be considered in terms of support/resistance areas inside the range. Since we are near 1200 resistance, let price/volume guide the way to either continuation or fade the gap trades. Any fade the gap trades lower should find support in 1188 area, and a bounce from here could be a normal pullback ready to move to new highs. Continuation trades must be monitored for moves past 1200. If this area clearly fails look countertrend sell setups later. If we break thru 1200, monitor for a trend day up as price is likely heading to test recent daily highs at 1221 as long as 1200 holds, and look for moves to 1206, then 1216, along the way. Many possibilities, but on most wide overnight action, its often best to go with the flow of intra-day structure as it unfolds relative to all the possibilities early on.
WED - 12-01-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - The ES first move of the day higher was higher to probe 1200 resistance, offering several gap continuation C1 long trades to start the day. The first retrace move provided a price/volume short trade at 9:15 (just below 1200) to see if price could move to new intra-day lows (1196.75, fill the gap, etc,) with an initial target to 1193 pullback to swing support area, and then an eventual target to the 1200-1188 low, but instead price held higher in the 1200 area, retraced approx 50% of the first move (small loss on sell trade) to maintain a clear up bias to start the trading session. Therefore, stay with up bias and long trades as long as 1198 area holds to see if intra-day high can be taken out (1203). If not, chop will form in 1200 area and eventual breakout will lead the way to the down targets mentioned here, or the up targets mentioned during the opening comments.
WED - 12-01-2010 - (DAY SESSION PART 2) SUMMARY - Staying with up bias after Day Session Part 1 provided a nice long trade from the 1200 area up to 1206 area as expected. With a clear up trend day in force, a classic E=MC2 deep pullback trend day long trade developed (1204 area at 12:30) looking for gains to the intra-day high target (1208). This proved to be a breakeven trade at worst as price never broke away from the key 1206 area, up or down, for the rest of the session. E=MC2 trend days are best handled in a patient and passive mode as most trend days try to shake out weak hands as price works its way in the trend direction.
THURS - 12-02-2010 (OVERNIGHT - OPEN) MACRO - On the daily charts, price will either "hold above" 1200, or head back into the 1200-1050 bracket again , this time with a much greater chance to take out 1171 and start the move 1120. 1200 is the key now. Yesterday was a gap up above 1200 but it still has to hold. The 1206 area will be the first sign. OPEN - Price moved higher inside the 1216-1206 bracket over night to 1212 and seems to be testing the 1206 low to start the trading session. If 1206 breaks then a test of key 1200 is likely. Yesterday was a sign that prcie may be breaking out above 1200, but it was a one day event and has to hold. At the open price/volume is signaling lower, and then we will have to see how the first move/first retrace sets the tone for the day... The key areas to watch are 1206 and 1200 area. We could easily start the session in 1212-1206 chop if price can't move down after the opening sell signal condition that is in place.
Since this is an on-the-run collection of trading calls by the same individual with little discussion otherwise, maybe this thread would be better served in the JOURNALS section.