A gap up this morning puts the ES close to the upper regions of the current consolidation channel. Despite rising input costs, unrest in the MENA region, a slowdown in China, Europe's sovereign debt crisis and the earthquake in Northern Japan, the market remains close to its highest levels since 2008.
The previous Gaps Up from April 1st, 4th and 6th each filled their respective gaps before climbing back up within the consolidation range. Until the market proves otherwise, I will short into resistance at the upper part of the range and and buy the support at the lower part of the range. I will not defend these positions as a move outside of the consolidation will likely be followed by a continuation in the direction of the break-out. If it happens to the downside, it should be on heavier volume than we have seen of late, if it happens to the up-side, it will likely be on low volume.
Levels to watch today on the ES:
Resistance above at: 1336-1337, 1339-1340
Support below at: 1331-1332, 1326-1327, 1323-1324
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We got gap fill. I wouldn't be surprised to see volume under 1.4 million contracts on the ES today and less than 110,000,000 shares on the SPY.
ReplyDeleteI expect that a boring day of trading action remains. I will be starting my weekend early. Enjoy..
Back to trade the close...
ReplyDeleteLong ES 1324
No defense below 1322
ReplyDeleteOut of original trade at 1322.
ReplyDeleteLong Again at 1321
Add another contract at 1319.25
ReplyDeleteHard stop at 1318.50 on both contracts
Average Entry on the two positions at 1320
ReplyDeleteConsider break even stop now at 1320
Still holding both
ReplyDeleteI expect a move back up to 1326-1327. It may not happen b4 end of day today, but that is my target.
ReplyDeleteSell the 1319.25 entry at 1324.25 for a 5 point gain. Still holding the 1321 entry
ReplyDeleteWill hold the 1321 entry into next week with a break-even stop.
ReplyDeleteWhat an end to the trading day, I didn't expect that break-down to happen. ES closed the day back within the consolidation range, so the sell-off lower has not confirmed any weakness yet
Sold 1321 Entry via limit order yesterday at 1328 for a 7 point gain.
ReplyDelete