Friday, October 29, 2010

ES Futures Morning Review 10/29/10

I like to play around with the charts when the market isn't doing much. I added R0.5 and S0.5 lines along with a 2-day average of the (H+L+C)/3 price. This morning the market is just staying between the R0.5 and S0.5 lines and mostly staying above it's 2-day average. I think that I will watch this chart for a few days.

Thursday, October 28, 2010

ES Futures Morning Review 10/28/10

At first, I wasn't sure that the market was going to close the gap. When it started tumbling, however, it just went straight down to the Pivot price. We did get a bullish divergence at the pivot, but the market is acting more like short covering rather than eager buying by bulls. Yesterday's high is currently providing resistance.


Wednesday, October 27, 2010

ES Futures Morning Review 10/27/10

Quite simply, support levels this morning failed and became resistance.

ES Futures PreOpen Review 10/27/10

It's been a bit of a struggle this morning, but the market is staying above its 10-day average and yesterday's low - so far.

Tuesday, October 26, 2010

ES Futures Morning Session Review 10/26/10

Interestingly, S2 and the 10-day moving average on the daily chart are at the same price. Again, buyers are picking up stocks at that price level. Resistance is at yesterday's close. Isn't it interesting how the market keeps bouncing off of the S1 price?

ES Futures PreOpen Review 10/26/10

During the last 9 days, the market just hasn't been able to close in the new high area. This morning, the market is trending down to test its 10-day average (again) and the S2 level. We have a 1000 ET economic report that may move the market. Otherwise, it should be mostly technical trading today.

Monday, October 25, 2010

ES Futures Morning Review 10/25/10

It's always fun to try and figure out where the majority of buyers and sellers will place their trades. This morning the majority of sellers waited for the market to test R3, and kept the market below that level. R2 is trying to provide support. Of course, large buyers would like to get as low a price as possible. We will see if the market accommodates those wishes.

Range Expansion Following NR7

Friday was the most narrow range day of the past 7 days, or an NR7 day. You can expect a range expansion following NR7 days. Today's range expansion occurred overnight. We will have to wait for the 0930 ET open to see how much profit taking occurs.

Friday, October 22, 2010

ES Futures Morning Review 10/22/10

We finally got our narrow range morning. Just like the overnight market, this morning's market is rather uneventful with no news to shake the market. Just hanging around the Pivot where it is safe and comfortable.

Thursday, October 21, 2010

Gap Closed 10/21/10

It was dubious for a while, but the gap did finally close.

ES Futures Morning Review 10/21/10

It looked like R1 would hold as resistance, but buyers kept the market above yesterday's high. Large buy orders then propelled the market past R1. So, the bulls are still in control, and we have a new 5 month high.

ES Futures PreOpen Review 10/21/10

The Jobless Claims report did little to move the market. The Futures is seeing resistance at R1 with support at the Pivot. We have had two above average range days. We are due for a lower range day. Chances are good that the market will close the current gap with yesterday's close at 1175.

Wednesday, October 20, 2010

ES Futures Pivot Holding As Support 10/20/10

The Pivot is holding as support, and the $TICK has hit +1000 multiple times this morning. This is bullish. Beige Book, however, could spoil the party.

Checklist For Traders

Surgical teams at VA hospitals are reducing surgical deaths by using aviation and NASA types of checklists prior to surgeries. Maybe we should have a trader's checklist to reduce losses in trading.
  • What is the market's current momentum direction?
  • Is it testing support or resistance?
  • What is the expected range of the day?
  • Economic report releases?
  • Earning's releases?
  • What was yesterday's high volume price?
  • Where are the trader's pivots?
  • What were yesterday's high, low, close prices?


ES Futures Overnight Review 10/20/10

The Futures market is above today's Pivot line, and it is above its 10-day moving average. This is dispite concerns over mortgages and the rate increase in China. The Beige Book report at 1400 ET today is expected to show a slowing economy. The market may stay in a below average range this morning. The afternoon market will be watching for the Beige Book report.

Tuesday, October 19, 2010

ES Futures Mid-Day Trend Reversal 10/19/10

Around noon ET, the Futures made a new high, but IBM and JPM did not. Also, there was a $TICK bear divergence all occurring near the S1 resistance level. Aggressive traders may short at the divergence. A less agressive move is to wait for a lower pivot low followed by a short $TICK correction back to its upper Bollinger Band, at which point, the trader will short the market. If the market is truly reversing, the market should not revisit the pivot high. When the $TICK comes near its upper band, the correction should be over. Thus the potential loss is small compared to the potential gain.

ES Futures Morning Review 10/19/10

We have JPM above its yesterday high, and IBM below its yesterday low. After 1000 ET, the Futures traded up past its S2 resistance to the S1 resistance as JPM and IBM trended higher together. As I'm writing this, the Futures has gone past S1 as IBM is trending up again. So far, the market has been able to stay above its 10-day moving average for most of the morning.

ES Futures Pre-Open Review 10/19/10

IBM is one of those stocks that has a big effect on the S&P 500 index. I sometimes use it to confirm a move in the futures. Today both Apple and IBM has dissapointed the pre-open market. Also, Housing Starts are flat for the year. So the market once again is testing its 10-day moving average. A close below that average would be a negative.

Monday, October 18, 2010

ES Futures Morning Review 10/18/10

The Futures tested its 10-day moving average again during the pre-open or overnight session. This average is still holding as support.

There wasn't much of an open gap with the Pivot, but we did have a nice gap with Friday's close. The market was able to close that gap. Currently, the market is finding resistance just below Friday's high (1179). So far, it is staying above the Pivot.

Thursday, October 14, 2010

ES Futures End of Day Review 10/14/10

We had some nice reversals on tests of Pivot lines today. Let's look at three situations.
On the 1 minute chart for Situation 1, we can see decreasing $TICK momentum on multiple tests of the Pivot line. Eventually, price starts to follow momentum as it fails to trade past the Pivot line.
For Situation 2, which is just below S1, we have an even better price - $TICK divergence on test of S1. The second price test was more obvious with a sinking $TICK.
For Situation 3, we didn't get an obvious $TICK divergence. However, it is not uncommon for the market to reverse during the last half hour of energy trading. Again, S1 holds as resistance.

ES Futures Morning Review 10/14/10

We've had two up days with above average ranges. Today we have a down morning with a lower that average range. The market did close the open gap with the yesterday's close and the Pivot. With some profit taking and negative unemployment news, the Pivot is being a reliable resistance point.

Wednesday, October 13, 2010

ES Futures Morning Review 10/13/10

There was some profit taking early in the trading session, but not enough to get the market below yesterday's high. So far as a result, we have an unfilled gap. The overnight high provided some resistance, but the bulls were able to trade the market just below R2. Not a lot of buying power as indicated by this morning's high $TICK being lower than yesterday's high $TICK, but very little selling.


Tuesday, October 12, 2010

ES Futures Morning Review 10/12/10

The Futures market is remaining above its 10-day moving average.

A down gap following an up day has a slightly lower probability of closing the gap with the Pivot. However, the market has managed to come within a tick of closing that gap this morning. Buyers again stepped in at the 10-day moving average to raise the market back to its Pivot.

Monday, October 11, 2010

ES Futures Morning Review 10/11/10

The bond market and banks are closed today. Along with no economic news, there is little to move the markets. Friday was a slightly above average range day, and this morning is a below average range morning. When the market is off of support, you can anticipate some profit taking by long equity holders. These traders will try to sell at as high a price as possible. So, many will try to sell on test of a resistance level. This morning most of the selling occurred at Friday's high, and the overnight high. The market just has not been able to make it all the way to R1. It did close the open gap with Friday's close, but it has not been able to close the gap with the Pivot level, as yet.

Thursday, October 7, 2010

ES Futures Thursday Review 10/07/10

During the lunch time period, the Pivot held as resistance, and S1 failed as support. S2, however, successfully provided support, and the market eventually rallied back to the Pivot after S1 failed as resistance.

ES Futures Morning Review 10/07/10

We got the high probability gap close this morning. Also, we got a nice bullish $TICK divergence at S1.

Wednesday, October 6, 2010

ES Futures Morning Review 10/06/10

As usually happens, the day following an above average range day experiences a narrow range morning.

Resistance, so far, is yesterday's high.

Tuesday, October 5, 2010

ES Futures Morning Review 10/05/10

Again, the futures market has bounced off its 10-day moving average. This morning, the market has failed to close the open gap. R1 resistance failed, and held as support. The market is now testing R2. R2 is currently resistance.

Monday, October 4, 2010

ES Futures Monday Review 10/04/10

The futures was able to close just above its 10-day moving average.

After closing the open gap, the market spent the morning trading down to the S2 level.

Saturday, October 2, 2010

Closing of Gaps With Floor Trader Pivot

Playing around with numbers this Saturday afternoon. I looked at the percentage of time that the ES Futures market has closed an 0930 ET open gap with the Floor Trader Pivot as defined as the (High + Low + Close) / 3. I used data from the past 2 years, and the daily time frame of 0930 to 1615 ET.

Gap Ups

For all up gaps, the gap was closed 59% of the time.
For gaps of less than 10 points, it closed 67% of the time.
For gaps of less than 6 points, it closed 77% of the time.
For gaps of less than 4 points, it closed 81% of the time.
For gaps of less than 2 points, it closed 92% of the time.

Gap Downs

For all gaps, the gap closed 62% of the time.
For gaps of less than 10 points, it closed 74% of the time.
For gaps of less than 6 points, it closed 81% of the time.
For gaps of less than 4 points, it closed 85% of the time.
For gaps of less than 2 points, it closed 97% of the time.