Prospects for todays range (/trading potential), in wake of tomorrows #'s...?

Discussion in 'Index Futures' started by adamcholeva, Dec 1, 2005.

  1. So interested in what all of you es, nq et. al traders, think about the potential for range (and trading opportunities) today Thursday, day before the employement numbers.

    Here's how I see the scenario - outlined with a mentioning first of the general scenario as I see it, and then thoughts on the prospects for tomorrow.

    1) we're in a quite established uptrend, that for the last 3 days has gone through a very natual correction

    2) TA wise, the correction, once it started out monday, was called for and it was inevitable it had to go south for more than 1 day/ or 10 points - some washing out was required for the mkt. to continue its uptrend.

    3) During this inevitable correction, we've been receiving loads of very encouring economic news. The efforts from the media to justify/"explain to us" why we've seen another down day has been good entertainment:
    Today after sexy GDP numbers, it was of-course the (completely indifferent) Chicago PPI numbers traders were bearish upon. Tuesday it was the durable goods orders number they blamed for the down-day, that yes...did come in stronger than expected, hinting solid growth and at this stage not an inflationary red flag, as reflected by the the dollar firming and the bonds softening just the bit one could expect. The soaring of the greenbag along with the eurodollar's relative strength vs. domestic bonds, is a good indication of the "feds tightening is near its end" belief is still intact.

    4) Have the correction gone far enough, for the market to resume its uptrend? First, when considering the above mentioned sound fundamentals we've received during the correction so far and the mkt.'s reaction to it, it almost appears like we all want this corrrection over and done with quickly, so we can get comfortably long again on a sound foundation TA wise.

    5) Well, have we then managed to get the deed done in a quick 3-day fix? If we were to look at the ES alone, it seems to me we could be done and ready for some upside again. But don't know about nq and ym - they could require a bit more downside before we're lined up - I'd love to look at daily charts with closes for yesterday (wednesday) around 1660 and 10800. Not trying to pick (swing) bottoms here, just attempting to gauge the general TA outlook from the dailies with respect to intraday trading opportunities.

    6) So, with prices already up quite a bit in the Globex session (es +5.5, nq +7, ym +30 - as the close was pretty much lod for all three, it seems like short-covering), what do you all think of today: an anemic session waiting for tomorrows numbers? Traders alredy prepared now to take long positions in anticipation of a rally, even with prices continuing to rise in todays rth session. Or a another notch down, so we've thoroughly cleaned out for tomorrow? Personally I think the #'s have to quite off in order to hold us back, but have a hard time picturing a long up bar today. Looking forward to your input.

  2. fader


    hi - can you pls specify which part of TA calls for a mandatory correction of over 1 day?

    i have not run the numbers on avg range on the day before nfp - perhaps the easiest thing to see if they are narrow range days is to eyeball the last few months at least... (or run the numbers if you have time, should be easy to code a filter for the first friday in any charting script soft.)

    re. globex already up - how can you tell it's short covering - i thought it's mainly because nikkei has broken 15k to new highs and correlation driven buying has lifted both the european indices this morning and globex.
  3. fader


    p.s. - here's the ongoing move in the yen - the line shows a 2x avg daily range (20 ATR) added to the low of each preceding day's bar - i guess still waiting here for the "inevitable" 2day correction... :)
  4. QUOTE]Quote from fader:

    re. globex already up - how can you tell it's short covering - i thought it's mainly because nikkei has broken 15k to new highs


    more than 60 % of the Globex sessions gains occured prior to the open of the nikkei - the main chunk actually right after the close of us rth, and the the re-opening of the Globex session. Call it short-covering or some smart money flowing in (we can't know with the open interest # we're supplied with )
    , but the close of us equities/cash indexes was lod within a tick or two.

    As for my ta correction call, calling it ta was probably stupid on thsi board as it might offend some posters view on what constitutes ta. I don't subscribe to one thing so you can call it discretionary mixed with mkt. internals...but... the converging breaking of the daily tl's on the 28'th on the three, the trin and adv/decl. behaviour indicative of a bullish mkt. sentiment struggling with overbought levels, and the predominant s and r levels called upon by the charts/price.a., along with cute fib lines/wawe lines if one likes to draw these .

    my basic point is just, that considering market sentiment now as I see it as a whole, we *will* go´higher shortly from here, if not for some really outrageous numbers or a surprise event of the kind that statistically happens very rarely.