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ES Short Term Trading 7-16-10


A Monkey’s Ramblings on a map to somewhere

*Red Lines are Price Action Support/Resistance lines
*Cyan Dashed Lines are Weekly Pivot lines
*Fib Retracement of 786 is shown with Green line(s)
*Yellow(ish) lines are a Pattern showing both a small ascending triangle BUT more importantly, some range contraction of sideways trading for a few days
*Volume bars are displayed as lighter Blue across the horizontal axis (overlapping some of the other components of the chart)

Click image for original size
es daily for 71610


So, that’s the layout.

Yeppers, it’s option expiry Friday, which always can toss a monkey wrench into “normal” expectations.

1080-1100 seems to be a current significant range boundary. What’s more important to my view is, after a decent magnitude run up during the past week and a half or so, the market’s challenged and still challenging the 1100 price with daily bars of market contraction. This 1100 zone/level coincides not only with a PASR level I’ve got, but also with a 786 Fib retracement for those that follow fibs, and this Weekly R1 @ 1097. Daily R1 is 1101 for Friday fwiw.

After reviewing a bunch of individual stock charts, most of them are over extended to the long side or have a messy bullish pattern setup at best. Three that I ran across that looked only semi-decent were: AZO, NFLX and BIDU. The Russell-2000 was weaker than the other major indices for what it’s worth. As for volume, the rally’s been anemic as every dog and his brother has been intimating on their website and blogs. Don’t forget that we’re entering the Summer slow down though.

ES price is trading between the 50 and 200 sma and slightly above a down trend line (none of which are on the chart … it’s got more than enough lines and pretty colors to confuse me). So those “indicators” are mixed and messy.

Anyway, look to Bruce and Kool and others for intraday MP mapping etc. And hope this is helpful to some extent. Depending upon the overnight trading and the open, I'm looking at a potential straddle or strangle on the SPY.
Koolblue,

I see on your charts two bands.
What kind of bands is it?

Trader43
Im not at all bullish Paul!... im just trying to scalp a small countertrend trade!..remember the seasonals are due to turn down (and probably have already!) for a few days!... took one off at 1068.00 for plus 1.5 handles and put my stop at 1065.00 for a risk free trade on the other..looking for the same exit..
Originally posted by Trader43

Koolblue,

I see on you charts two bands.
What kind of bands is it?

Trader43
they are called prc bands (some kind of regression indicator that appears very useful!...) e- mail me and i'll send it to you!
..ps: only works on ninja trader tho!!!!
order to exit and stop in.. gotta run ..back soon!!
great work Phileo....and might I be so bold to add that they broke the O/N low and never returned....
Originally posted by phileo

Originally posted by phileo

unless price can get above YDay's Lows, I'm going to call this a trend day down now.

NQ new lows
No long setups for me.


reasons:
1) no gap fill. normally 4pt gap down should not be a problem.
2) preMkt bias was down, and opening 5min. was an opening drive down.
3) price is running away from a declining VWAP.
4) 2pt shallow retraces so far.
5) broken below expected support levels, YDay's low being the most significant one.
Originally posted by koolblue

Im not at all bullish Paul!... im just trying to scalp a small countertrend trade!..remember the seasonals are due to turn down (and probably have already!) for a few days!... took one off at 1068.00 for plus 1.5 handles and put my stop at 1065.00 for a risk free trade on the other..looking for the same exit..


Yeah, OK. I didn't really think you were. especially after your calendar observations you were so kind to post.

Market:
even with hitting the Low of the week, PA has been bad for longs. SImply looking at 5m bars, waiting to see an ABC, sorry, they are not there.

Bruce, look at 30min bars, is that AIR from late day (RTH) 7-8-10, looks like 1064.25 down to 1062.50

any thoughts?
At 50% retrace.
Click image for original size
es 09 10 7162010 60 min5
Originally posted by BruceM

great work Phileo....and might I be so bold to add that they broke the O/N low and never returned....
Originally posted by phileo

Originally posted by phileo

unless price can get above YDay's Lows, I'm going to call this a trend day down now.

NQ new lows
No long setups for me.


reasons:
1) no gap fill. normally 4pt gap down should not be a problem.
2) preMkt bias was down, and opening 5min. was an opening drive down.
3) price is running away from a declining VWAP.
4) 2pt shallow retraces so far.
5) broken below expected support levels, YDay's low being the most significant one.



Not so great for me, i exited way too soon at 1074.5 !!!
I am so filled with regret for being scared out by that retracement. I even said 1076 was the level to watch, but didn't listen to my own advice.
Frustrated too. This was supposed to be THE trade of the day.
Just some food for thought. IN EW terms if this is on big ABC irregular flat starting at the high from the end of the day on 7/13 and down to the low of 7/15 for wave a, then up to yesterday's closing high for wave b then we are currently in wave c down for this large pattern

and

wave c = 1.618 wave a at 1060.75.

This is only using RTH data since I do all my EW work on the cash charts.

I'll see if I can figure out how to post a chart.

Something interesting to note. wave c = wave a at 1074 and prices did indeed consolidate a bit around this number as per Bruce commentary.
That would come out to about the 1050-5 area, if we double down after this bounce for the futures. See ascending black line and about the 50% retrace for the 1003-1099. Seeing nothing positive yet.
I'm using continuous day trading volume not just RTH volume....fyi.