Monday, December 06, 2010

Emini Futures Trading / Inside Day


from the trading desk of CFRN... 
Tick Tock, Tick Tock…. zzzzzzzzzzzz Call it a hangover from Friday’s Unemployment Report or a lack of economic news, the SP EMINI literally traded in a 5 pt. range from high to low after the cash market opened today.  The center of gravity was the 1221/1222 Weekly Trading Zone. Some sources noted that more concerns in the European Zone weighed on the SP Emini this morning.  Others noted Ben Bernanke’s 60 Minute interviews kept the market range bound after his remarks suggested that the economic recovery “may not be” self sustaining and the Fed could commit more money to boost the economy if needed.  In the end, the market “coiled” or congested inside of Friday’s range.

S&P 500 Emini Futures / ES

Technically speaking -
What does this all mean? Coils, triangles and congestion? The next move should be defined by the break-out of the “coil” or triangle. Look at the chart above, the appearance of the chart is a triangle tipped on its side. The sideways activity is fluctuating between two converging trend lines. The upper line is declining and the lower line is rising. Given time the market is going to break the boundaries of the “coil” forecasting the next move. Personally I like to wait for a close above or below the triangle before I make a trading decision.  Keep this in mind, sometimes this pattern marks a reversal but often times it is viewed as a pause in the prevailing trend with the height of the triangle being the target.  HUH? If we continue to trade inside the “coil” then one should expect to see support at the 1219/1217 area and the resistance level at the 1224/1225 area.  In my opinion a breakout of the “triangle” would be a close above the 1226 level or a close below the 1216 level in the SP EMINI.  If this occurs then the CFRN Weekly Trading Zones at 1235/1236 above and 1207/1208 below come into play. Maybe David Williams (PageTraders) Turning Point Calendar will be correct after all...

Stand up to your obstacles and do something about them. You will find that they haven't half the strength you think they have. - Norman Vincent Peale

Market Profile Numbers for 12/07/10
VAH    1223.25
POC   1222.75
VAL    1220.75

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