Saturday, December 31, 2011

Happy New Year 2012

Analyzing the Stock Market and Equity Futures 12/31/11

I like watching the 1 Minute chart of the ES Futures. It helps me judge market strength when it is testing extremes.


Yesterday, the market tested the previous day's high just after 1000 ET. A strong move typically involves the $TICK hitting + or - 800 and the $TIKI hitting + or - 24. In this case, as the market tested the previous day's high, the $TICK was well below +800 and the $TIKI was well below +24. A rather weak effort, and the result was a down trend for the rest of the day. There just wasn't any major buying programs in the market to push it higher.


The $TRIN closing at extremes on its daily chart is an interesting study. Sometimes extreme market moves signal a short term exhaustion in its current trending direction. When the $TRIN closes above 2 on an extremely bearish day, the next day may see a rally to the upside. Likewise, when the $TRIN closes below 0.6 on an extremely bullish day, the next day may tumble to the downside a little.

I looked at a small market sample to test this assumption. In this sample, the $TRIN closed above 2.0 - 15 times, and it close below 0.6 - 13 times. When it closed above 2.0, the next day was bullish 60% of the time. When it closed below 0.6, the next day was bearish 54% of the time. Not something that you want to bet the farm on, but something to be aware of when this happens.

The last chart is the Pivot lines for Tuesday, 1/03/12.


Thursday, December 29, 2011

Tuesday, December 27, 2011

ES Futures Stalls At December 8 High And R1 12/27/11

As you can see, the market stalled today just below the December 8 high, today's R1 and the upper end of its Keltner Channel. Ultra low range today also.


Thursday, December 22, 2011

ES Futures End-of-Day Review 12/22/11

A low volume day with few sellers in the equity markets. The combination R1 - 0930 open price held as support. It is interesting that the futures could not break the R2 resistance until the equity market closed.


Wednesday, December 21, 2011

Celtic Solstice - God Rest Ye Merry Gentlemen

Winter Solstice occurs tomorrow,Thursday, at 0530 UTC or 12:30 AM Eastern. From that point on, the sun goes back north in the daytime sky.


ES Futures End-of-Day Review 12/21/11

Narrow range day following a wide range day, which is the normal pattern. The market found support at S1, which today also corresponded with the 10-day moving average.


Tuesday, December 20, 2011

Monday, December 19, 2011

Friday, December 16, 2011

The ES Futures Fade R2 12/16/11

We got a good bearish $TICK divergence as the ES Futures tested R2. If you like to fade the early morning move, this is a good place to do it. $TICK divergences are typically more reliable near test of support or resistance lines.


Wednesday, December 14, 2011

ES Futures 12/14/11

The market spent most of the day bouncing around S1. This is common with a narrow range day. The true resistance today was the 0930 ET open price.


Tuesday, December 13, 2011

ES Futures and the Floor Trader Pivots 12/13/11

The 5-minute ES Futures chart is a great tool for trading the Floor Trader Pivots. Typically, if a 5-minute bar closes above or below a pivot line on a test, the market has a high probability of reaching, at least the half way point between pivot lines. Also, making trading decisions near the pivot lines keeps your risk low.


Trading On European News 12/13/11

The Europeans will come together and solve their debt crisis problems - No they're not - Yes they are - No they're not - Yes they are - No they're not - ..........


Monday, December 12, 2011

ES Futures End-of-Day Review 12/12/11

The Europeans are in a bad mood again. After trading below S2, the market stayed there for most of the afternoon. The little buying spurt in the last half hour may give the bulls a little encouragement.


Thursday, December 8, 2011

ES Futures End-of-Day Review 12/08/11

The market finally traded down to its 10-day moving average on European economic fears - again. Actually, test of the 10-day moving average should have happened days ago.

The S&P 500 index could not trade above its 200-day moving average, which is acting as resistance. Its 50-day moving average is now above the 100-day moving average, but still below the 200-day moving average. A slight positive for the broader market.


Wednesday, December 7, 2011

ES Future End-of-Day Review 120711

We got the 1030 to 1045 ET reversal off of S2. The market ended up more positive than I thought it would this morning. So, we are all the way back to yesterday's high.


Tuesday, December 6, 2011

ES Futures End-of-Day Review 120611

The ES futures spent most of the day in a very narrow range. We did get a breakout from a small wedge to R1, but then the market crumbled back to the Pivot. Longer term bulls are more likely to enter the market closer to the 10-day moving average.


Monday, December 5, 2011

ES Futures End-of-Day Review 12/05/11

We finally got some profit taking. In the afternoon, the morning's low became resistance with the Pivot providing support.


ES Futures Morning Session 12/05/11

Lower volatility today. Support is Friday's high, and resistance is R2.


Friday, December 2, 2011

ES Futures Weekend Charts 12/02/11


ES Futures Anticipating Good Employment Report 12/02/11

The ES Futures is anticipating a good Employment Situation Report this morning. The market, however, is reaching previous resistance levels. Be cautious since this could become a "Buy on the rumor and sell on the news" event.

Of course, if the market trades above resistance on good volume, then resistance becomes support.