ES Wednesday 5-23-12

Some nice areas shaping up in 5 point increments today. Bigger picture had us selling off yesterday from last weeks RTH midpoint at 1316 - 1317 where an intraday ledge had formed . The Va low is there so that is the critical upper resistance zone that bulls would need to take over today. Mondays highs are here too.

We don't usually get weekly bars that are inside to the previous week but so far that is what has happened this week. The last two days have been low volume rally attempts and it seems that one of the days was just some post option expiration release. So my bigger view is that we should soon try to test last weeks lows as long as we don't close above the 1316 number today.

The bigger obstacles on the downside will be the high volume breakout point from monday at 1303 and then the one down at 1299.50. Current Overnight low as I type is 1302.25.

Even though my longer view is for testing the lows of last week it will not keep me from long trades down here. 85 % of the time we have price overlap in the Rth session so that would mean that yesterdays lows should get tested in the 1307.50 area in the day session and we are at support as I type. My small longs are starting at 1303.75 in the overnight but my main trades will happen after we open.

The best thing to have happen is to see them run out the O/N low in the Rth session and then attempt the rally back up. Use your daily and overnight ranges to keep you focused

The other key area is the 1312.50 as we have those nice overnight swing highs there.

For agressive traders you can use either the one minute range or the 5 minute range as a filter. This would require you to be a breakout trader ( on the 5 minute )and you can simply take breakouts of that range by 2 tics and shoot for those target prices above or below. My suggestion would be to use 2/3 rds of that range as a stop but pull up the stop to only one point of loss if you show 1.75 points of profit. see trader joes thread on the mini IB to see how he was doing it.

hope all do well today !
well that is the dog and pony show over for today...hope some of that ramble made sense..have a good one if u play more
congrats on the trades bruce

i had 98 market down and taht was a nice quick buy...what did you have in between that and monday's lows of 93.75? i did not have anything there so stood on the sides on that second bounce...i think they will try to take out monday's lows and if they do 90 and then 86 should be areas of interest fwiw
Nick I only had the open of RTH on Monday at 96 even....bigger traders will watch the weekly RTH open just like us small frys watch the daily opens

thanks for the kind words too...

Paul...most times you will only have 2 - 4 GOOD volume spikes per day...that makes sense as I think big traders aren't gonna spend there day day trading but they may have a few well defined areas to do business...I mention that because we only have two real volume areas today ...that 07.50 spike post report and the one down at around the other traders are attracted to that one and volume over TIME is building there too....most times the VPOC's will form about 1.5 poinjts arround those spikes and the bell curves are there
thanks bruce, did not have the weekly open written down unfortunately

for those that follow fib numbers, the low today thus far is the 61.8 extension of yesterday's range...always good to have those handy