THURS - 12-02-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - By 8:30 price had moved back above 1206 and price volume signaled an opening buy (8:33) at the low end of the 1216-1206 range. Another price/volume buy set up at 8:53 as price worked up to 1216 to complete the first move of the day. As long as price holds in the 1212 pullback area, bias remains up, however price is at the top of 1216-1206 ...If 1216 breaks...1223 is next If the intra-day trend turns down below 1212, then look for a move back to 1206 area. Monitoring 1216-1206 range for now, with an up bias....
Quick note since this thread has been moved to journal section I trade the ES with a the top-down approach versus a bottom-up approach, which means big picture perspective comes first, and trade setups come last. Before I ever consider a trading set up I work to read the market and develop expectations for where price is trying to go in relation to a host of different market structure conditions (Trend days, Intra-day chop, Price moving inside or outside a balance area, Volume confirmation etc.). For my own trading, this means I spend 90% of my time analyzing big picture structure above all else. I always know where price action is located relative to current buyerseller balance. Iâm always trying to define what type of intra-day structure is unfolding, etc. A big picture structure first mentality has been the key to my trading success, and keeping a running diary flow like this helps keep me disciplined and focused...
THURS - 12-02-2010 - (DAY SESSION PART 2) SUMMARY - Once 1216 broke at 10:30 it provided nice support on the way to 1223 as expected, as back to back one-directional trend days formed. The best deep pullback buy for a push to new intra-day highs developed after a pullback to the 1216 area at 12:20. After moving up to major daily resistance near 1223, the next deep pullback just after 2:00 provided one more opportunity to let long for another test of the highs late in the day. We start tomorrow after two trend days up in a row moving price to major daily resistance, which should be mean some type of pause day, but we shall see......
FRI - 12-03-2010 (OVERNIGHT - OPEN) MACRO - On the daily charts, this is the ES's second chance trying to break out of the 1200-1050 bracket on the way to the 1280 area. The key now is can price breakout above 1224? Price starts today right up against 1224 resistance, with an overall up bias as long as 1200 holds. If 1200 is to be taken out, it will happen in stages with 1216 needing to be taken out first, then 1206. If 1224 is taken out we are the path to 1280 in the macro big picture. OPEN - With two trend days up in a row, expectation is for a pause day, but you never know. We should have a good idea of what is developing after the first move /first retrace of the day. If price does pause, it's really just a pause inside the 1224-1200 area waiting for further eventual upside, so day trading opportunities will be dictated by how intra-day structure forms relative to the 1224-1216, 1216, 1206, and 1206-1200 areas. At the open take the first price/volume setups that develop either way, and look for first move up to test 1224 and/or first move down to test 1218. Again, I never predict. Instead, just try to go with unfolding flow with evolving expectations to place trade set ups in big picture context.
FRI - 12-03-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - After the 7:30 jobs report, price dropped from the 1224 area and by 8:30 had settled in the 1216 area for a gap down, which alerts to monitor 1224-1216 and 1216-1206 relative to a likely pause day. At the open, the 1216 pivot area is the key to putting in context a fade the gap C1-C long setup versus a C2 down gap sell. At 8:32, a C1-C price volume long develops above 1216 (1217.25) to start the first move of the day higher with expectations to 1224. Price makes a first move to 1221.50 in what is clearly is a very tricky 1224-1216 pause area, and then makes a first retrace to test the opening low of 1216.25. First move, first retrace analysis leaves us in chop and price is clearly in 1224-1216 range (extendable to overnight highs and lows). Therefore with a confluence of a very strong market (last two days), poor economic news (today), and the likely pause after two trend days under any conditions, it looks like limited chop trading opportunities today unless the trading trend better aligns later in the session Until then with a wide chop range in place, looking for scalp type trades after a high or low area is reached, and then price turns around with a price/volume pullback entry.
FRI - 12-03-2010 - (DAY SESSION PART 2) SUMMARY - Using the 1224-1216 balance area as a guide while expecting slow trading, the best setups today were intra-day chop based scalp setups after tests of either the high or low areas. Today, these scalps only developed to the long side after tests of the 1216 area. Price/volume based long scalp opportunities occurred at 9:38, 11:45, 12:41, 13:08 and 14:10 and price eventually worked its way up to the top the 1224-1216 area by the end of the trading session.
MON - 12-06-2010 (OVERNIGHT - OPEN) MACRO - On the daily charts, this is the ES's second chance trying to break out of the 1200-1050 bracket on the way to the 1280 area. The key now is can price breakout above 1224? Price starts today at the lower end of 1224-1216 consolidation with an overall up bias as long as 1200 holds. If 1200 is to be taken out, it will happen in stages with 1216 needing to be taken out, then 1206. If 1224 is taken out we are the path to 1280 in the macro big picture. OPEN - After a pause day on Friday, price starts out this week consolidating in the pause area. We will watch to see how developing intra-day structure relates with overlap in the 1224- 1216 area (clear chop), a pullback below 1216 (expect 1206) and if price fails to move lower and moves back above 1216 watch for 1224. Multiple possibilities as price consolidates in the overall 1224-1200 area, and since the daily bias is up, we will get most excited if a downside moves fails and new upside move develops as long as price remains above 1200. Early sell conditions to start, and watch the 1216 area near the open for a first potential down failure as the first move of the day and first retrace unfold.
MON - 12-06-2010 - (DAY SESSION PART 1) GAP/FIRST MOVE/FIRST RETRACE - Price starts the week in the three day in a row 1224-1216 chop area. The only opening trade attempt was a C3 sell at 1220.50 as price made its first move down on the way to 1216 which resulted in a small loss as price made a first retrace higher up to the 1224 resistance area. If price moves below 1220 maintain a short bias, look for sell trades, and monitor the 1216 area for downside follow through and/or a new swing high back up later for potential long trades. Until 1224 breaks, be waryof long setups, and it is best to look for chop trades iniside1224-1216 after either the high or low area is tested and price moves back the other way.