Big Down Day as Market Moves Toward Bottom of Range

The trade I mentioned in the video from April 29th played out picture perfect. After heavy downward pressure today, I will be looking for my next long entry somewhere between 1175 and 1181 on the ES. I will talk more about this trade in my weekend update video.

Intra-Day Update, Nice Selling Off Important Trend Line Resistance

Looking Ahead to Friday's Open

If you could only go back to March of last year and know that buying every dip in the market would be easy money, well you'd probably have a larger account than you do. My point is that after Tuesday's substantial sell-off on high volume, buyers came back into the market and prices are higher once again. The market will have a way of determining just when enough people feel safe enough to buy the dip so that buying the dip will only be a trick. The bottom will fall out when we least expect it. So my message here is not that you can't continue to buy the dips, but that you must be cautious and know that buying the dips will not work forever.

With an increase in volatility of late and larger daily ranges coming into play, I will be looking to play this market in a range between 1177 and 1216 (on the ES) until we break up or down outside of this range. That doesn't mean we can't break out tomorrow and make new highs, but I'll alter my thinking when that happens, not before.

In the near term on the ES, I am seeing resistance at 1207 and 1216.50 and support at 1198-1199. There is further support below at 1192 and 1177.

For some video analysis, see below:

OK, And Now What?

Biggest Drop Since Feb 4th, Now What?

Part 1:


Part 2:

Looking Ahead to Market Open

Potential Daily Range Targets for 4/23/10 Indicated in E-Mini S&P Futures Chart Below:

This chart is just used as a guide to suggest a potential range for the day. The lower green line represents a conservative top for the market. The higher green line represents an aggressive top for the market. The higher red line represents a conservative bottom for the market. The lower red line represents an aggressive bottom for the market.

Some Volatility Entering Back Into the Market

Indecision seems to be plaguing the markets as price is see-sawing of late. The average daily range has increased and there are some similarities to what we saw in January right before the markets sold off. Although S&P 500 Futures moved back up to test previous highs after the dust settled on the SEC's Goldman accusations, there are signs of weakness as new highs could not be achieved. On top of that, there is increasing uncertainty over the Greece situation. The Euro sold off and the dollar gained in overnight trading and S&P Futures fell almost 12 points as a result. With bullish sentiment high and the VIX at historically low levels, a correction could be looming on the horizon.

Economic news has not been much of a catalyst for the markets lately, but watch how the markets respond this morning to the PPI, jobless claims and existing home sales data. A close today below Monday's low of 1179.75 would be the first real confirmation of a potentially weakening market. If the markets sell off but find buyers at 1180, watch out for a possible topping range between 1180 and 1210.

Slop and Chop

The first hour of trading is suggesting that we see a choppy and potentially tight range trading day. I still like entries between 1202 and 1203 on the ES for a long play to retest the highs toward the 1210 area... If you do enter long in that range, use a tight stop, i.e. 1201.

New Highs or No New Highs?

In the overnight session, the S&P Futures climbed up to 1209.50 essentially retesting the market highs from last week (so the end of day trade setup I mentioned in yesterday's video played out) and has since traded back down to support at 1201.75. Earnings continue to be stellar and there is no reason to think we are anything but bullish. 1201.75 is great support so if you are looking for a long position, 1202 to 1203 would be a good spot to enter in on the ES. I expect the highs of 1210 will be retested today, so that could be a good target. Potential Range to the upside on the ES would be a high of 1211.25-1213.75. If we get a a big buy surge, I would see a maximum high on the day at 1216.50. I will look for short entries assuming we make it that high. Potential range to the downside would be 1193.50. Really negative momentum could see downward price action to 1185. These ranges are just guidelines and not predictions. I am biased to the long side based on the market. The key will be to see if we break out above 1210.50

Market Catches a Boost After Apple Earnings

Apple beats earnings by 10c and stock surges in post market trading. The overall markets saw a boost as well. I was actually looking to get long at the end of the day myself in response to some bullish chart patterns. Below I have included some live analysis recorded as I tried to enter a position in the last 20 minutes of trading today...



I will be looking for a continued move higher in the markets tomorrow. Potential new highs could see 1216 on the ES. If we get there, I will be looking to go Short at that point. More on that later this evening or in the morning...

Sell-Off Does Not Continue

We had an attempted fake-out to the downside today as the markets briefly made new lows and hovered below the 1183 mark for some time. In the end though, buyers stepped up and the S&P's closed back within the 2.5 month uptrend channel. So any fears of a substantial sell-off may be quelled at least for now.

Watch for Confirmation Below 1183 on ES

A confirmed move below 1183 on the ES will signal an opportunity for short entries in the market and should force an extended move to the downside.

Weekend Update for April 18th, 2010

Levels to Watch:
Resistance at 1193, 1196, 1198, 1201, 1204.75
Support at 1183, 1180, 1175, 1170, 1164

GS the Catalyst for the Sell-Off. Who Would Have Thunk?

GS charged with fraud regarding misleading investors about sub prime mortgage products. Leads markets to their biggest sell-off in over two months. I am seeing more support at 1182 on the ES if we get down there today...

ES Retouches 1200

Market looking weak this morning but a nice potential long play formed when the ES retested 1200. A nice bottoming tail formed on high volume so we could be seeing the low for the day. If this tail holds up, we could see an upward price target back towards yesterday's highs...

Upper Trend Line Trade Setup Comes Into Play

Negative News Still Does Not Have Much Influence on the Markets

Increases in Initial Jobless Claims and Continuing Claims were reported this morning as well as negative consumer confidence readings. The markets saw a brief sell, but have recovered now. We'll see if this news holds any weight when the regular session opens.

Covered Half ES Position at 1204.25

I had an order to cover the 2nd half at 1200.50. We came within 2 ticks of that in the overnight session, but I didn't get filled unfortunately. So, I am still holding the 2nd half short. If we move up much from here, I will cover the 2nd half.

One thing to note in the equities market is that the SPY opened up pre-market trading at $120.90. That is just above some intraday support. So, I'm waiting to see if SPY trades below $120.87 to see if there could be some continued selling. If SPY can then confirm below $120.63 I will be expecting a down market today. Otherwise, we will see new highs again today...

Still waiting on Charles Schwab to report this morning

Market Update and a Look Ahead to Thursday Morning

Short ES at 1206.75 at the Close

Great resistance point here at the end of the day

Intraday Trade Setup on the ES

S&P Futures Tag 1200 Ahead of the Market Open

The ES hit 1200 for the first time since before the crash in 2008 and immediately pulled back. Look for support at 1196, if we trade below 1196, look for more support at 1193 and expect to trade back over 1200 today with potential resistance at 1205...

More Earnings Goodness

JPM beat earnings expectations on the heals of Intel's positive earnings from yesterday afternoon and the markets are getting a bid this morning. We have seen minuscule trading volume and small trading ranges of late. I would be ready for some more volatility to enter into this market and expect to see an expanded trading range as well. Earnings season is beginning to present an opportunity for this market to move even higher. Markets trying to decide if they will begin a consolidation phase as the Dow is at the 11000 range and the S&P is at the 1200 range. Although the markets have shown subtle signs of weakness, there have been no technical confirmations to suggest shorting the market yet. It is interesting to note that the market is not seeing more strength in response to quite stellar earnings news. On the flip side, the market has not reacted negatively to poor economic news of late, so hard to tell what it all really means. All we know is that this market is over extended and that it is due for a pull back at some point. For this reason, when we finally do see some selling, it will probably be swift. Overall, I am neutral to positive right now and waiting for a technical sign to confirm weakness...

1188 Holds Up in the Overnight Session on the ES

All three companies that reported earnings this morning beat expectations and the markets are currently trading upwards. Lets see what happens after the equities markets open at 9:30. I expect positive momentum, but I will watch to see if we can break below 1188 to add strength to the bear's cause. If we do break down below 1188, watch out for tricky trading in the 1184 to 1188 range. Market close will give a better indication of where we stand. If we close below 1190.75 on the ES, it will mark the first time since February 23 that we closed below the prior day's low. We'll need a close below 1183 however, to confirm negative sentiment. On the upside watch the 1194 to 1195 range to see if the weakening trend line dating back to February 5th will offer any resistance.

Weakness in the Markets?

Well there is some uncertainty after the bulls couldn't maintain momentum as sellers came in to close Monday's trading. The Long term upward trading channel dating back to February 5th is breaking down. There are some signs that we could begin a period of consolidation this week. Watch for support levels at 1188, 1183, 1175 and 1171 on the ES. I'll be watching to see if we begin trading in a range this week. I'll be looking for a potential ceiling between 1198 and 1200 and a base between 1170 and 1171. If we can break down below 1170, that could signal the beginnings of a correction in this market. Below you can see some video analysis of today's trading action.

One other noteworthy item I didn't mention in the video is that the Dow closed above 11000 for the first time since before the market crash in 1998

Morning Market Update for Monday, April 12th

Another week sees another new 52 Week High in the markets. The Dow Jones briefly flirted with 11000 at the close of trading on Friday and overall the markets are looking bullish heading into the next round of earnings beginning this week. Overall I expect strength to continue so buying dips at good support levels is not a bad idea.

In the following video I do some technical analysis on the E-Mini S&P 500 market to find a couple of potential trade setups. In the event that these trades play out, I will try and do some live recordings of the trades as they happen.

Morning Update

Have a look at my recorded market analysis broken up into two videos. In the second video, price reached a key level on my charts and I entered a trade while making the video.







FYI, I exited half of my ES Long Position at $1174.25. Tentative target for the second half is $1178.50 and a break even stop at $1172.25.

Morning of April 6th 2010

Its been quite some time since my last post and for the first time I will add some video analysis here. You can view a market update video that I posted last night on www.wethetrader.com and then see the embedded video below where I dicuss a potential trade setup.