Market Sells Off Again

We saw new lows in the last 15 minutes of trading today and continue to sell into the post market session. The market flirted upwards for much of the day but couldn't see any sustained buying. The ES remained propped up in the 1034 to 1040 range for much of the afternoon, but the selling eventually came on late. We got a nice bounce (5+ Points) off the 1024 support that I mentioned in earlier posts. Market still weak. 1010-1012 is the next downside target on the ES.

Stopped Out of My ES Short

Neutral Bias at the Moment. ES needs to hold 1029 support to prevent the bearish price action from continuing and ES must overcome 1051 to initiate a reversal...

Short ES at $1036.75 into the Close

Holding on in anticipation of new lows.

New Lows on the Year

No sign of a rebound from here. Not yet anyway. Market is looking very weak. We should see lower lows still...

Low So Far at 1036.25 on ES

I'm flat while waiting for a signal to confirm that the lows are in. I do not yet know that we will not retest the lows and possibly make new lows... I'll post again if I take a trade...

Bad News Round the World

Markets decline around the world. FTSE and DAX both down over 2%. China economic indicators revised downward. Euro drops more and dollar rises as safe haven currency.

I know I said I would be looking to get long at Gap fill (1050 on ES), but any longs will be scalps for the most part. Timing will be key on the longs, I will feel safer with short entries. We'll see how the day progresses...

Support at 1050, 1042, 1037, 1032, 1024 and 1012
Resistance at 1059.50, 1063, 1067 (or 1069 at this morning's gap fill) and 1080

Selling Ensues in the Overnight Session

In a surprise move this evening/early morning, futures are declining significantly to new lows. It looks like we are going to see the gap fill down to 1050 on the ES sooner rather than later. The question is, will the markets bounce up off those levels or will we make new lows? It will be interesting to see where the equities markets open this morning, but I will be looking to get long somewhere around gap fill. Official gap fill is at 1050.25 on the ES (106.02 on the SPY), but the gap fill range is between 1047 and 1055.50 (105.66 and 106.50 on the SPY). I will be looking for an official fill before getting too enthusiastic about a long position. Keep in mind that prior lows dating back to the 25th of May are at 1032.50 on the ES. I will be watching volume to look for shifts in supply and demand to influence where I get long. There will be bounces in this market, which is why I am looking to get long, but glancing at the bigger picture, fundamentals are not good and technicals are bearish. So be cautious. I do expect the market to see new lows. The difficult part is getting the timing right. Will it happen this week, or will we see a fake-out rally first. That is always the tough question...

One thing to note is the bear flag that formed from the highs on the 21st downward to the last two days of sideways consolidation. The bear flag looks to be playing out and if it does, we could see new lows down to 1012 to 1018. If it fails, meaning we don't see further lows past 1060, we could see a pretty nice move upward in the opposite direction...

I will post more this morning as the markets open...

No Clear Signal for Direction Yet

Hard to trade today unless you have a very good understanding of Algorithmic trading. There have been no clear signals. I am staying out of trades at this point, though it appears we are slightly more bearish than anything right now as the ES is trading below the VWAP, the intra-day Moving Averages are all sloping down and we have traded below the 61.8% retrace from today's high to today's low. Taking a short at the VWAP (currently at $1073.25) is not a terrible play, but really, I am staying away at this point. My broker has been making commissions today, but I haven't been able to catch any substantial moves in any direction. Market too dull, I will be patient and wait for something to develop...

And an End to a Choppy Day

So it turned out to be a choppy consolidation day in the markets without giving too much indication as to what will happen next. One thing of note is that we closed the day above last week's down-trend channel. Lets see if this new minor support can hold heading into next week. There is really no telling quite yet. Enjoy the weekend...

Retest of the Overnight Highs?

I expect a retest of the overnight highs at which point I will look to enter short somewhere between 1074 and 1076 on the ES. I will not defend this position...

There is also potential to enter short where we are currently trading at 1072, which is the upper region of current downtrend channel. I will not take this short however, I will wait.

Where Are We Going From Here?

The 1065 level I mentioned yesterday was hit on the ES early this morning. I am currently flat and neutral in my bias. My neutrality however is only in this moment. I am still bearish in the bigger picture. I will be cautious moving forward, but there is a strong chance the ES trades below 1050 and possibly tests the prior lows. I say this for a couple of reasons. One, we have crossed below gap window from back on June 10th. So if we do confirm below 1065 the next level of support will be 1055. Official gap fill will be 1050.50. Two, if you use a Keltner channel indicator on a daily chart for the ES, you can see we are poised to move towards the bottom of the channel. That suggests a potential target range between 1037 and 1050. Prior low on the ES is 1034.40.

If we do move down below 1040 to retest prior lows, it will be the third time doing so. In that case we cannot rule out the possibility of making new lows on the third attempt. It will be tricky trading as we move back down and attempt to find the low, so you must be very careful. We'll see how today's trading goes and see if we get a consolidation day or if we see the decline continue further into the weekend. I'll try and comment again as this day's trading reveals a little more...

Market Selling

Watching the 1072s on the ES. If we move below 1072 we could see 1065. Trying to gauge whether or not the market is putting in a base here in the mid 1070s which could be the lows for weeks to come.

As FOMC Announcement Approaches

Market has been slow moving and flat for the most part since the the downturn after the worst home sales number on record. We have moved back up to try and test 1090 which is a nice level to go short. I would be going short now if it wasn't for the FOMC announcement coming up. After the announcement I will be biased to the short side as I look for good entry points once the market settles down a bit following the news. Again, not trading anything for at least 15 to 30 minutes after the announcement. Maybe the market will tank and I will have missed the opportunity to get short. If that happens, so be it.

I expect the Fed news to offer some positive comments. They are bound to discuss the fact that China is no longer pegging the Yuan to the dollar. They will say that this will be good for the US trade deficit with China and they will say that they expect exports to China to increase. I will be looking to short the 1100s if we move back up to test that level after the announcement. But, nothing to do now, I am flat, waiting to see what happens...

NOTE: My downside bias of the moment will change if we confirm a move above 1105 on the ES.

Really Bad Housing Numbers

Really negative housing numbers sent the market downwards quick this morning... I am looking to get short again at 1086-1087. I've been scalping shorts off the 1084 price, just taking small profits as the market is turning a little flat at the moment. We have support at the current lows on the day at 1080.25. That could be a bottom, but I am leaning on seeing new lows. The only thing that makes me suspect of continued downside movement is that the flush down this morning was on very low volume...

What is Happening this Morning?

So, this morning I continue to expect a move down into the 1080s. We have new home sales at 10:00am EST, but don't expect any significant market reaction.

We have had a steady slow grind back up in the overnight session, though we have sold a bit in the last 30 minutes. I will be looking, ideally, to see a pullback up to 1101-1102 where I will look for short entries. Other levels I will be watching for resistance and potential pullbacks are:
1099, 1105, 1109-1110, 1117-1118 and yesterday;s highs at 1129.

Watch out for the FOMC Announcement at 2:15 EST. There won't be any surprises here as the Fed Funds Rate will be left unchanged, but still, the market will likely react to additional announcements with some volatility. I most likely won't trade for 15 to 30 minutes after the announcement until the market settles down. Often times the first move is the wrong move so be careful. I'll try and update my thoughts here at the time of the announcement...

Support Levels to be aware of are 1084-1085, 1070-1073.
I don't imagine that we can get movement below 1070, but if so, look at additional support at 1057, 1048 and 1039.

Ultimately I see some more upside potential in the markets after confirming a reversal off either the mid 1080's or the low 1070s... After that I expect that we see a move upwards to 1137-1142 on the ES. But for now, just going to focus on today...

Quick Update

Market looking like it should break down. I am looking to get short on any advances in anticipation of a breakdown below the 1100 support on the ES. Target is the mid 1080s... I don't know if the sellers will come in today to bring it below 1100, but I expect this to happen soon...

A Comment On Trading

There was a lot of bad news yesterday but the market, as much as it pretended it was going to, could not break below support at 1100 on the ES. Price action seemed to dictate that the market would break down, but it turned out to be a sneaky way to shake out the weak buyers. It was a slow dribble down late in the session and long entries were not rewarded. Finally the ES jumped up 10 points in the last 15 minutes of trading. I was long many times near the bottom, but finally I gave up after scratching on about 7 long attempts. High Frequency Trading Bots have been especially annoying of late as we have seen extended periods of very small range bound trading. They are difficult to trade against as they have adaptive technology that makes it difficult to recognize repetitive patterns with the algorithms. I have not placed any trades yet this morning as I am waiting for volatility to pick back up. So far we have seen a small range overnight and a small range this morning. Market is trying to break out to new highs now. If we do, I will look to buy the pullbacks... Resistance above at 1118 and 1123...

More Bad News

Philly Fed number came out very negative and it took a while, but the market has since sold and is now hovering at the overnight lows... We continue to see negative news in this market, so I will be surprised now if we do push much higher... Watching closely to see if we get a breakdown below the overnight lows which also happen to be the previous resistance highs of the previous one month range. At this point, if we do rally back up, I will be looking for short entries... and if we break below the 1100 level, I will be looking to add to my shorts...

Market Continues Upward Move

The market moved right up to the 1117 resistance in the early morning hours and then sold off to 1110 after a poor jobs number showed that initial and continuing unemployment claims were greater than expected and not consistent with a recovering economy. Consumer Price Index was also slightly negative. However, the market is moving back up just ahead of the open.

We have a chance to approach 1140 on the ES in the coming days and I will be selling the market at that level. Next resistance points are: 1118, 1123-1125, 1137 and 1142. I will be watching market behavior at any of these resistance points and will be looking for short entries.

Now lets just see if we can retest the 1117.50 highs today and possibly 1123-1125...

S&P Breaks Above One Month Range

It turns out that my original outlook on the markets was accurate, that we would break above the 1102 (ES) resistance on the next test. But is this buying real? We saw a slow grind upwards all day long today in the markets. We haven't seen this type of price action in a while. The question is, will the slow grind up on low volume continue or will the current 1110 to 1113 Resistance on the ES hold up?

Based on price action, my near term expectation is that the positive sentiment will continue. Though I will wait to see how the market opens tomorrow before solidifying that opinion. New support is at 1103. We have resistance above at 1117, 1122, 1137 and 1142. I will definitely be looking for short entries between 1121-1123 on the ES. I will also be looking at the overnight session for a potential short around 1113...

Short at 1103.75 on ES

So we broke above the previous highs and are hitting some stops now... I will scale in some more if we move higher, but I am looking for a finish of today's trading to the downside...

Next major resistance at 1110 - 1113. Must be careful with this trade as there is potential to move up to that level.

Approaching the 1102 Resistance on the ES

I said that I expected trading to break higher if the 1102 resistance was tested again on the ES. However, as we approach that level now, I am less confident that we will see a breakout on this test. I would have liked to see the market move lower first before turning back up to test this level. A move higher may happen in late day trading if we test it again, but I will not be going long in anticipation of a breakout yet...

We still have this morning's gap up to contend with. Lets see if we see another late day sell off to fill the gap.

Still Range Bound

We have been in range bound consolidation below the 38.2% retrace from the April highs now for almost a month. The ES Has tested the 1100 - 1002 level three times, but has reversed off it each time. This supports the idea that the market continues to be weak. Even so, if the 1102 resistance level is tested again, there is a strong chance we will break through. Watch for resistance above at $1112 to $1113 on the ES.

Though economic and political uncertainty remain with the BP Oil disaster in the gulf and debt problems in Europe, there are short term catalysts that could inspire buying in this market. The Euro looks to be seeing support while the dollar finds resistance. As well, we have seen recent strength in the European and Asian markets.

So, in the short term, I am still slightly bullish, but I expect choppy market conditions to continue throughout this week. If we do move up, I will be looking for potential short entries at the following resistance levels:
1112-113, 1118, 1136, 1142

If we move down, look for the following support levels on the ES:
1184, 1075, 1072, 1059, 1048, 1040

It is possible that we move down to 1075-1077 in the early morning, at which point I would look for an opportunity to get long.

I don't think the lows are yet in for this market, but I do expect a move higher before seeing new lows...

Short Term Bullish

Well, we didn't pierce the 1040 level as I had anticipated and it seems that the low may be in at least in the short term. I will be biased to the long side heading into trading today. Look for resistance at 1070.50, 1079, 1084 and 1089-1090. Support at 1061, 1055 and 1047.50

Potential Market Bottom on the Horizon

Still looking to pierce 1040 and we'll see from there. Support 1036 to 1040 on ES. We could break below that however... More on this to come

Already Weak Market Getting Weaker

After seeing some buying lift up the futures market yesterday evening, Fitch came out this morning and warned that the U.K. Debt concern is "formidable". Futures have since sold off. the $1058 - $1060 resistance I mentioned in yesterday's video worked out nicely as the ES reversed off a high of 1061 following news of the U.K. Debt concern.

We are currently seeing some buying come back into the market after new lows have already touched $1045.50 on the ES. I would not be looking for long opportunities right now, it is just too dangerous in this weak market that is now facing more bad news coming out of Europe. I again am looking to get short. Currently the VWAP on the ES is at $1052.50. Thinking about a short here, but I feel the markets have potential for slightly higher short term highs, perhaps back to $1054 to $1055 on the ES. I still expect to test the $1036 to $1040 range in the coming hours...

Looking Ahead to June 8th, 2010

Major weakness into the close today in the markets. Potential continued selling in the overnight session with support on the ES between 1036 and 1040.