Crazy End to the Day

If you don't know something that 99.99% of traders don't know, like how to foresee price action like we saw in the last hour and a half of trading today, then don't try to trade it. Watch from the sidelines and observe. It is almost impossible to scalp trade in the moves that we saw today without having market data that most of us don't have. Fear will lose you money almost every time in this type of market...

Damage Control

I have to say that it is somewhat impressive that the markets have not sold off more after the downgrade of Spain's Debt Rating. Still, I find it funny as the powers that be attempt to initiate damage control usings outlets such as CNBC to say the following:

"Fitch analyst notes that they wanted to wait to see the government's austerity measures (out yesterday) before cutting the rating. Says AA+ is still an extremely strong rating, and they don't think it's going to be cut again in the next year, and they don't think there will be problems funding the deficit."

Perhaps announcements like this help quell the fear or perhaps we just don't have enough volume to sell off more significantly since it is the Friday before the holiday weekend...

More Resistance Looms Overhead

The Markets managed to hold onto the gains from yesterday's trading in the overnight session and have already reached some key resistance just underneath 1107 on the ES. Watch the current highs of the overnight session at 1106.75. This could potentially be the high in the market today. However, there is still potential to trade higher and test the 1107 to 1122 range. I don't expect the markets to have the strength to trade higher than 1122. If somehow we did manage to close today's trading above 1121 or 1122, that would show impressive strength and we could expect higher prices to continue.

I will be looking for the current "up" trending action to break down at which point I will be looking for short entries. The first area of support to contend with is 1096 to 1097, then 1089 to 1090. Below that look for support at 1070 to 1071, then 1055 to 1056.

On another note, we could see a consolidation type of trading day today with possible minor new highs as it would be in the best interest of the Fed to see the markets close on a positive note for two consecutive days before heading into a long weekend in which it wants consumers to feel confident... Although I will be looking to short this market, that may have to wait till next week... we'll see if buying action can continue this morning or not...

Wild Session Overnight As Dollar Falls and Futures Rally

The ES has already traded in a 36 point range in the over night session rallying from lows of 1055.50 all the way back above yesterday's close and above yesterday's highs. The ES has since traded back down to 1080.25 on the heels of slightly disappointing GDP and jobless claims numbers.

The markets are trading with extreme volatility and without a clear direction. For this reason I will continue to focus on scalp plays until a clear direction can emerge.

Resistance at 1092, 1107, 1116, 1121.50, 1130, and 1135.50
Support at 1070, 1056 and 1037

There is some upside potential in the coming days however, overall outlook remains very bearish.

Resistance Holds in Morning Trading

The key 1188 - 1190 resistance on the ES held up in the morning session putting question into any strength continuing on the heels of yesterday's reversal. It is only mid-day now, but there is an intra-day down trend forming which could indicate a continuation of selling into the afternoon. Until we get a close above 1189 or 1190, there is no reason to be thinking on the long side. Lets see where we close today...

Key Levels to Watch this Morning on the ES

Nice price reversal yesterday after the big gap down has the markets temporarily bullish. We are approaching 1188.75 on the ES and whether or not price can close above this level will validate or eliminate the bulls cause.

The market overall is still bearish but we could see further short term movement to the upside.

Additional resistance levels of note are at 1094, 1098 and 1120
Support levels at 1070.50 and 1051.50

FYI, I have no swing plays in this volatile market as I have been exclusively short term day trading of late.

Long Entry on ES

Long at 1059 on ES with Stop somewhere below May 6th Low of 1056.

There is key support here, so the risky long is worth it as a potential swing play. This makes a bold assumption we are now seeing a short term market bottom. If this position moves in my favor, I will hedge it by taking short scalps as the markets move up.

Any long entries are dangerous plays in this negative market and must always have stops.

Still Trading/Consolidating in Lower Range

The markets have yet to show any sign of a move back to the upside and the current price action suggests there is a high percentage chance of a continued move further to the downside. My strategy at the moment remains to be in and out of positions relatively quickly while attempting to take quick profits. Priority is on entries to the short side.

A close above $1122 on the ES will be necessary to start thinking about long positions. Watching for a break below the current lows at $1098.75. Next support level is at the 200 MA currently at $1094.50. Next support level is at $1091. Below that things could get ugly as there is no clearly defined support until maybe the May 6th pivot low of 1156.

Markets Sell... What Next?

We had some bullish momentum to open up trading this morning as the S&P 500 Index gapped above resistance and traded up in the first 30 minutes. However, buyers could not overcome multiple levels of resistance:

Resistance on the ES that sent this market back down:
1) 200 MA($1145.25) and 100 MA ($1147.75)
2) Previous support (now resistance) from 5/11 and 5/12
3) Ambush Retracement zone from the 5/13 highs

We sold off for the rest of the day and continue to sell now into the evening session as the ES has traded down to new lows. Lets see if support can hold around Gap fill on the ES which is 1106.25 to 1110.75. We must be very careful with any long positions at this point as a move below 1100 could create a substantial push lower, possibly back down to the lows from the market crash on May 6th... I'll be looking to take profits relatively quickly on trades in the current range. At the same time, if I can get a good short entry, I will be looking to hold onto part of the position for a potential runner to the downside (in the event that we break below the 1100 level on the ES). There is possible support at the 200 MA on the ES Daily Chart, currently at 1094. I'm not interested in any swing long positions until we confirm a trend reversal back to the upside.

Looking Ahead to Tuesday's Open

There was some bullish up-trending action in the second half of trading today but the 1140 resistance is close overhead on the ES. We are still in consolidation mode until we confirm a break above the 1140 resistance. Gap Fill at 1107.50 was not officially met, so that leaves a potential move back down to that level a possibility for tomorrow.

Potential Short Term Bottom In

Short term up trend confirmation. Looking for long entries... Looking to enter if ES dips back to 8 period MA on the 10 minute chart... Next point of resistance at 1126 - 1127. Potential Short scalp at 1127.50

Euro at 14 Month Lows, US Market Sells Into the Close

Market Looking Strong, but Resistance Looms Overhead

On Monday the markets rallied well above last Friday's highs and have more or less consolidated for the last two trading days closing today at new highs, a bullish price pattern. There is significant resistance just above the current highs between 1173 and 1175 on the ES and it looks like we may test those levels tomorrow. We'll see if the markets gap up above that resistance for tomorrow's open or if we will test it during regular trading hours. It should prove to be difficult trading in the 1170 to 1183 range as there are many points of resistance, any of which could be tested.

I will be looking for opportunities to short this market throughout that range.

If the markets close above 1185 on the ES, that will put a temporary end to the bearish sentiment and add some fuel to the bulls confidence to retest previous market highs. The first thing to watch however, is if resistance can hold up in the 1170s...

Market Analysis for Wednesday May 12th

Market Direction From Here?

We are still only three trading days removed from last Thursday's unprecedented market crash and subsequent bounce, a move that can't help but reveal a technically and fundamentally flawed market that may be a precursor to an even larger move to the downside in the future. Volatility has increased and it will be interesting to see how the markets trade on Tuesday. After a huge move to the upside in the futures market overnight heading into Monday, we saw a relatively tight range of trading throughout the day session in the equities markets. Will volatility pick up again today?

There is so much uncertainty right now and for me I am going to observe the markets over the next day or two before trying to speculate how they will behave. Many traders I have spoken with are anxious to short this market. For that reason, I don't think it is going to be that easy. I am looking for whippy price action that will stop out all the anxious traders who are looking for the next big price move.

We have already seen a huge move to the upside after the trillion dollar bail-out package was announced in Europe. Is that going to be enough to curtail a falling Euro and worldwide economic uncertainty. I think it is more noise than anything else. It is a large number just thrown out to ease tensions in the short term. We'll see how it plays out, but I think eventually it will get uglier before it gets pretty.

So going into tomorrow I am looking to try and get on momentum trades if they materialize but primarily I will be looking to be in and out of trades relatively quickly. I will look for ping pong type range setups and plays off the moving averages. I will not be trying to predict any major market moves to the upside or downside because there is just too much uncertainty right now and the technical levels I have are suspect at best. I will continue to let the dust settle and I will only take trade setups if they materialize in a way that creates solid risk to reward. I will post updates as they materialize...

Big Gap Up

The futures continued to get a bid overnight and we are now trading over 1150 on the ES.

I will be looking for short entries. Some resistance levels to consider possible short entries are 1162, 1172.50, 1176.50, 1185

Support below is tricky, there is a large range without clearly defined support levels. This is one of the reasons I will be looking for a short entry that could find a nice runner to the downside. Possible support levels include: 1151, 1147, 1126 and 1108

Europe Announces $1 Trillion Bailout in Attempt to Stabilize World Markets

Futures are up, Euro is up, dollar is down as the US equities markets look to gap up on Monday Morning.

Key resistance between 1144 and 1145 on the ES. A close above this level will be a bullish sign for the markets.

Looking Ahead to Monday's Open

Analysis in progress. Aiming to have market update before midnight...

Unbelievable, Market Crashes

Thats why you have stops... I was stopped out of my Long at 1139 from my 1144 Entry.... I was upset at the moment that it was a 5 point loss, but happy now that I had a stop. Had I not had a stop in place, I would have blown up my account in 1 afternoon...

What to Look for in Thursday's Trading

Key Support between 1142 and 1146. If we trade down to these levels I will be looking for a Long Scalp that could turn into a swing trade preferably around 1144. The way that works is that you take half your position off the table for a quick profit anywhere from 1.5 to 3 points, then you let the other half position go for a runner to the upside. If trading comes back down below your entry, you exit the 2nd half of the position for no loss...

If we trade upwards tomorrow, I will look for short entries at three different target ranges.
1: 1170 to 1173
2: 1175 to 1177
3: 1182 to 1185

I will pick the best reversal scenarios within those ranges based on price action...

Market Opens Lower

We already bounced off a key support level at 1155 on the ES. The next major support level is between 1143 and 1145. I will be looking to enter long positions in that range. These will be scalp longs while leaving at least half the position open for a potential runner to the upside.

Looking Ahead to Wednesday's Open

Bottom May Be In for the Day

S&P reached gap fill from March 31st and range for the day is almost at 35 ES Points. We could potentially move back down a couple ticks lower, but the low should be in at $1165.25 on the ES

Bearish Behavior Overnight Sends the Markets Lower

Market is looking more and more like it is getting ready to roll over. The fact that we haven't been able to make new highs in a market that has been unrelenting in that regard shows that buyers are not quite as strong as we have come to expect. There was no real news catalyst that sparked the selling which may just be a sign that much of the bad news that has plagued the markets of late may be finally catching up with price. Whether or not buyers can fill this morning's gap down will be telling.

I am looking at 1180.50 to 1181.50 as a possible long entry. Below that we will look at double bottom of 1177ish as secondary support. A confirmed move below 1176.75 will be the first signal to look at potentially shorting this market if you are not already short...

Short Entry Potential Between 1192.50 and 1194.50 on ES

This would be a scalp trade for half the position. The key is to leave half your position for a potential continued move further to the downside... Stop Loss would be 1195.50 or 1195.75.

Looking Ahead to the First Week of May

An expanded trading range as well as several significant daily market declines in the past two weeks signal a change in the markets. Overall the markets remain in an up trend but they are showing signs of vulnerability. A key level to watch for Monday's trading is 1176.75 on the ES. A close below this level should lead to continued selling in what would be a long awaited correction.

However, until we close below that level, I will be looking for long entries in this market. I don't have a specific price point yet, but I will post any long entries I take.