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 !

Bruce,
thanks for posting (I voted you up because you are still so shy of 100K LOL,

The other day (a day last week)you mentioned looking at the volume spikes on the 1 minute bars.

I see a huge volume spike (relative to the rest of the volume bars) at the bar completing at 8:21am. I know you mentioned expectations for a probe lower, but regardless of whether prior week's Low is tested, if you just had that 8:21am 1 minute volume spike how would view it? what price in that single one minute bar would you consider a satisfactory test of the volume spike?

(or did I interpret what you said last week incorrectly, don't you lean toward volume spikes being revisited?)

Paul..before I had better charts I simply just snapped a line at the one minute bars that formed a spike and if I was long from below one of those I would exit most of my contracts as soon as we hit the lower mark of the one minute bar just to be safe...these days we have better charts and the one minute bars are only an approximation....but the point is that it shows that somebody is working the area so I am interested in those areas...big traders leave volume tracks ...

you will quite often find the vpoc or poc that end the days being at those volume spike marks because traders are all acting in unison and are also interested in those areas that had bigger traders involved....the footprint charts or tic charts can make the areas more clear and precise

for today the biggest volume came in at 07.75...not surprising since the RTH low of yesterday is there...an obvious area of interest

not thrilled with the short side down here below 1305 even though the On low hasn't been run out yet ..so my preference is to try and find longs again and go for that 07.50 as a target

trin , volume and ticks diverging with price has left me no choice but to buy into 1302.50.... going lite as I have been burned before by internals alone and biggest risk and reward is when we are outside the O/N low and RTH lows

ate the loser at 01.50...messed up as $ticks did go to new lows..will try once more if the 1300 can print and I get some flip in delta...remember 1298 is other key price below

for those who tried breakouts you will notice that the market went 1.75 points beyond the 5 minute range.on both sides...so u may or maynot have made money depending on your abilities or greed factor...it certainly isn't perfect...hopefully provide some frame work to go and reach key numbers....

last plan is to buy under the hour lows ....10 point IB into the key 98 area would be a good place to try longs

on 97.75 ..air is above and this is key area..lookingto target 99.75

whew..sometimes this game is one or lost by one tic....lucky on that exit and then just got stopped

last trade of the day is the long off mondays open print..two sets of single prints are still in the market..one at least should fill in ..expecially when they happen back to back /...so we should test up again above 99......billion dollar question is when ??? hopefully soon before we hit mondays lows...

99.25 is my target ..want to get out in front of that single fill and don't want to be tortured..

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

http://www.mypivots.com/dailynotes/symbol/536/-1/e-mini-sp500-june-2012