Dec 27th ESH2 Prep

Redbook at 7 am: How will traders discount this report? Bullish, bearish, or neutral?
Consumer Confidence at 9 am: What is the outcome of the report at 9:30 (an hour after U.S. Equity open and after having been digested by the market?
Closed above significant overhead resistance on Friday. Previous highs were 1249 (Wed’s high) and 1251 (Thur’s high); will these highs hold as support?
Where did we open in relation to last Friday’s close?
Major support is around 1237.50ish – we’ll want this to hold if the recent leg up is to sustain itself.
Will the upward sloping trendline continue to hold as support?

December 22, 2011 Market Analysis

December 20, 2011 Market Analysis

December 18, 2011 Market Analysis

Video Commentary

Fed Day

S&P 500

From a technical perspective, the S&P 500 (cash index shown above) found sellers at a significant downward sloping trend-line which has suppressed the bulls since the big drop in June. Tomorrow, the Fed will be announcing policy on the fed funds rate. With all the whipsaws and confusion that have been going on in the markets lately, it is hard to say what will happen next. Will Ben Bernanke add more fuel to the fire or blast the markets to the moon? Hopefully after tomorrow, the market will show its cards and give us a sense of direction...

EUR/USD

EUR/USD is exhibiting what could be a giant head-and-shoulders pattern. If the neckline is broken, we could see a significant spike in volatility. A measured target of the downside would be ~1.25... The instability of the Eurozone certainly aids this case.

S&P500

Failed Breakout

For the past week, most trading volume or "value" has been established above 1240 on the ES. A breakout to the upside and continuation of the uptrend seemed likely. Today however, a rally that would've started the next up-leg due to an IMF $600 billion lending program for the Eurozone [http://www.bloomberg.com/news/2011-12-07/u-s-stocks-gain-on-report-g-20-weighing-600-billion-imf-lending-program.html] was completely shut down. What's interesting is that the market may finally be reflecting the state of global economies: the recent "relief" rally was full of hot air; and the discounting of "good information" is becoming less effective. The chart above speaks volumes.

The markets have been chewing up and spitting everybody out with wipsaws, failed breakouts, etc. lately and it is driving even the most disciplined traders insane. The next breakout, whether it be to the up or downside will surely spike volatility.

SPX at Resistance

SPX has rallied to the midpoint of the previously broken symmetrical triangle pattern, the underside of a significant broken trendline, and traversed 78.6% of November's high to low. Another point of interest is the shooting star candlestick printed on Friday; the bears had a strong close. We're currently at a critical juncture of resistance. If the bears want to take us on a trip south, they'll need to take out support at ~1240 (12/1 low). I'd like to add that this may just be a consolidation period in the works; however, the Euro is forecasting something different...

The Euro further strengthens the bearish case. I find this chart most interesting.

SPX Brick Wall ~1250

Clean Cut Short

This chart is just looking ridiculously bearish.

ES Nov 28

The ES found support at the 61.8% Fibonacci level drawn from the low to high of October (green). The 50 daily ema (magenta) lies just above at around 1210 which, if reached, would also be a 50% retracement of the recent downtrend. This looks like a nice low-risk area to start looking for short candidates.

Next low risk shorting opportunity

Daaaaa Bears

It's do or die for the bulls

Triangle Pattern

Critical Support / Resistance ESZ1

A breakout either way would be extremely volatile

ESZ1 Will support hold?

ESZ1 Pre Nov 14 Analysis

For Monday Nov 14^th I have a bullish bias for the ES. On Nov 10^th the ES found support at the 50 daily ema. Buyers bid prices above the 5 daily ema overcoming the Nov 9^th selloff. Given the resilience of the bulls recently, I will be looking to get long on intraday pullbacks tomorrow. 1245 and 1290 and important levels of support and resistance respectively; I will not trade at these levels. I will also be watching Dec. Crude (CLZ1) closely tomorrow for a reaction at the significant trendline I posted about on Friday. Oil is a good indicator for the sentiment of the equity markets.

Dec Crude at significant trendline

ES Nov 8 Short

EUR/USD Nov 6 Analysis

Markets have been pretty choppy lately due to the Eurozone debt crisis. Any analysis should be taken with a grain of salt. With that being said, the euro/usd spot market is looking particularly bearish.

ES Nov 1 Long

ES Oct 26 Short

Stop @ 122950

ESZ1 Oct 26

ESZ1 Current Market Structure

ESZ1 Oct 25 Short

ESZ1 October 25 Roadmap

ESZ1 October 24 Long

ESZ1 October 24 Levels

SP's = single prints (buying/selling tail)

Beautiful Short

Perfect Set-up

ESZ1 October 20th

Pre October 20th Analysis

Tomorrow's bias will be based on which side of the low volume (121600 - 121200) we begin trading on. This is a key area right in between the 200 and 50 daily ema's.

ESZ1 October 19

ESZ1 October 18 Long Trade

ESZ1 Post October 17

Will the daily 50 ema (magenta) be support or will we blow through it and continue the longer term downtrend?

ESZ1 October 14 Long Trade

Post October 13 Analysis

ESZ1 sold off from yesterday’s high of 121600 during the ETH session. Buyers came in at Monday’s value area high of 118575 where we also saw confluence with the 50 daily ema. Whether or not the bulls can sustain this rally and get above Wednesday's point of control of 120750 during tomorrow’s session will be important. Significant overhead resistance still lies at the 200 daily ema of ~123175.

Post October 11 Analysis

Pretty quiet day as we digested the gains of yesterday’s rally. We auctioned horizontally just above the daily 50 ema, holding above yesterday’s POC. Today was also an NR7 day, meaning that today’s range was the narrowest in the last 7 days. I would consider this to be bullish, however given the gains of the past week, the ESZ1 is quite extended to the upside. Another chart that needs to be taken seriously is the daily 50 ema on the EUR/USD spot market. It lies ~0.20 euros overhead, and I would watch for a reaction from the bears if it’s eventually hit. The move of EUR/USD to its 50 ema would equate to a move of the ESZ1 contract near its daily 200 ema which is also a significant area of resistance.

Die Eisen Frau, Merkel: Post October 10 Analysis

The ESZ1 rallied in the first couple of hours of the RTH session when Germany and France pledged to stem the Eurozone debt crisis. We then auctioned horizontally at the daily 50 ema, forming a well-defined volume profile bell curve which was then broken to the downside. However, we found buyers around the 117800 price level who blasted us to the upside through the previously broken bell curve, completely overcoming any selling pressure. The ESZ1 closed above its daily 50 ema which is very bullish. The 200 daily ema lies above at ~122080 which should be the next significant area of resistance.

Pre October 10 Analysis

Last Friday, the ESZ1 contract closed a doji candle just outside of the upper range of its daily down channel (blue). It also closed below the 50EMA (magenta), and also found support at the 5EMA (blue). It will be interesting to see if the bulls can push us above significant overhead supply at ~118000, or if the bears can continue the longer term downtrend by taking us below ~114000 this week. The horizontal green and red lines are significant support and resistance respectively.

10/6 Market Profile Levels:

UVA: 116075

POC: 115550

LVA: 114900

October 6 ESZ1 Analysis

Thursday, price auctioned higher on the ESZ1 contract. Buyers stepped in at the previous day’s POC right at the RTH session’s open which started an intraday uptrend. We closed near the high of the day, which was the third straight day of higher closes from the 10/4 swing low of 106800. Although the ES closed above its daily 20EMA, the 50EMA lies right above at ~108050. Today’s high also overshot a declining channel which starts on 9/20, containing two swing highs and lows. This should be taken into consideration when trading on Friday, October 7^th. I’m still not convinced by the bulls that this longer-term downtrend is over.

ESZ1 10/7 Levels:

VAH: 115525

POC: 114925

VAL: 114100

H: 116050

L: 112900

O: 113500

C: 115800

50EMA: 118050

1140 – 1130 Important support for bulls 

October 6th ES levels

VAH = Value Area High
POC = Point of Control
VAL = Value Area Low
*October 5th levels

October 4th ES Long Trade