Following the largest down day of the year, US markets are looking relatively stable so far. Asian and European markets mostly down overnight. Concerns over the situation in Libya remain, but more importantly, there is fear that contention and uprising will spread throughout the Middle-East/North Africa (MENA) as risk remains in countries like Bahrain, Jordan, Yemen, Algeria, Iran, and Morocco. The biggest fear is that unrest would spread to Saudi Arabia, the largest oil exporter in the world.
Not expecting too big of a range today as the market may consolidate following yesterday's big sell-off. I will consider this market weak unless the ES confirms a move back above the 1327-1328 resistance. I am a buyer in the low 1300s and a seller in the 1320s (ES).
Existing Home Sale data to be released at 10:00am EST.
Levels to watch today on the ES:
Resistance above at: 1319-1320, 1323-1324, 1327-1328, 1333-1334
Support below at: 1308-1310, 1302-1303, 1293-1295
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hi verde,
ReplyDeletei m new here. i have been following your blog in the last weeks and i find the posts and your commentes very interesting. English is not my mother tounge but i hope you can understand me.
Despete the big volume would you buy here at 1306?
Long ES 1303
ReplyDeleteJust reading your comment... and there is your answer, I would buy here in the low 1300s. But please don't buy based on what I do... If you need to ask me, you should be trading a simulated account until you feel comfortable and confident enough to make buying decisions based on your own analysis...
ReplyDeleteThe support here in the low 1300s is strong, but be careful as this market is selling and selling is long overdue. It could continue down. I am still holding swing a short position. Scalping long acts as a hedge in my case...
thank you. Do not think the support at 1300 is too obvius? i mean we could see 1297 or maybe close the gap at about 1285 before we have another rally.
ReplyDeleteSorra i forgot my name: Riccardo
ReplyDeleteCan consider taking a couple ticks or 1 point profit here. Will most likely get a chance to get back in at a better price on a retest of the low. However, ES will trade higher before the day is out, so if to avoid exiting the trade and not having the chance to get back in, holding is not a bad bet either. If we break below 1300, no defending the long.
ReplyDeleteWhat would you say makes the support too obvious Ricardo?
ReplyDeleteAnother way to trade the current price action is to make the assumption that we will consolidate down here for a little while, so you could buy around 1301 and sell around 1304 for as long as that works. We could dip below 1300 before the day is out, but odds are that we will close the day higher...
ReplyDeleteSorry verde, i had dinner.
ReplyDeleteWith obvious i mean:
-every blog is proponing this level like a srong support
- it is a psychologicol level
- the high of the wawe ended on the first of february
Why are you sure we will close on the positive side?
Riccardo
Can never be sure of course.
ReplyDeleteWhether or not support may be considered "obvious" I don't know, I don't care. I base my levels on several factors including auction market theory, market delta, volume, standard deviations among other factors including my own experience trading.
The key to trading is understanding when you are right and when you are wrong and exiting your position at the most opportune time. There will be winners and there will be losers. Always. PnL over time is key. Not to state the obvious...
When the market confirms my support and resistance levels by showing that sellers or buyers are dipping off, I gain confidence in my trades. Look up Richard Steidlmayer. He has written great info on the subject of market delta...
thank you for the advice
ReplyDeleteRiccardo
Out of Long Position at 1308.
ReplyDeleteI will consider buying dips from here as long as ES doesn't trade back below 1300... I continue to like long positions at the lower 1300s
Overall, market continues to be weak. Today's action left the potential for further downside. I would like to specify that just because I like longs at lower 1300s today, doesn't mean I like longs there tomorrow. I will tell it as I see it...
ReplyDeleteIf you have any questions, feel free to shoot me an email at verde at wethetrader dot com. I will do my best to answer them in a timely manner...
ReplyDelete