Thursday, November 18, 2010

Emini Futures / Trading In The Zone


from the trading desk of CFRN...

Just when you thought it was safe to go back into the water... The Bulls showed who was in charge after erasing nearly all of this week’s early losses in today’s session. The breadth of the market was strong and broad-based across all asset classes.  DJIA +1.55%, SP EMINI +1.54% and the Nasdaq +1.55% and commodities including crude +2.3% and gold/silver +1.15%/+5% respectively.  Last night the market got a kick start from bullish comments out of Europe.  Ireland would cooperate with the European Union and the International Monetary Fund (IMF) on an aid package.  Earlier this week the uncertainty between the parties caused the markets to slide.  What a difference a few days make??  An additional boost was added when the US markets opened, the weekly jobless claims hit a two-year low and the Philly Fed reported an uptick in regional manufacturing.  Also cited was the Government Motors (GM) IPO (did I say that?) adding to the interest in equities.  Throw in a dash of short covering for those traders who were anxious to get short and got short in the hole.  If you were watching our program on CFRN yesterday we were warning folks this market was showing signs of a bottom- we forgive you.

Technically the market nailed our Weekly Trading Zone (WTZ) pivot today or the 1198/1199 area.  That area also represents a 50% retracement level from the 1224.75 hi last week to the 1171.00 low put in on Tuesday in the SP EMINI.  With that being said what’s in store for tomorrow?

In our opinion, with the close today in the SP EMINI we could see a follow through to the upside or a test of the 1205/1206 level and another WTZ or approximately a .618% retracement level.  If the bears try to retake control of this market I would envision this level as being an opportunity to go short.  Watch your CFRN Indicators for sell signals at that level.  Now, if we pullback into today’s range one should highlight the 1187/1188 area as support and particularly the 1181/1182 area as support.  Both levels are Weekly trading zones in the SP EMINI and ironically represent .382% and   .618% retracement of today’s range.

Stay Alert Stay Alive

The Magnetic Personality of the Weekly Trading Zones

S&P 500 Emini Futures / ES

This continuation pattern failed to confirm on the 5th candle as highlighted on the 30 minute chart above. It is important to allow any price pattern to complete before taking action. Today we have a perfect example

Bullish Rising Three Methods Pattern

Type: Continuation
Relevance: Bullish
Prior Trend: Bullish
Reliability: High
Confirmation: Suggested
No. of Sticks:   5
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