ES Analysis for 10/26/06

[ant 10]

ES Review

The ES had a transition day on 10/23, where it broke out of the trading range that formed between 10/12 and 10/20. On 10/23, the ES started to balance (retracement) in the upper end of its daily range. It continued to build a short-term balance area on 10/24 as well, as seen when both daily profiles are aggregated together. For the beginning of trading on 10/25, if the ES is in an uptrend, then the high volume area of the two-day composite on 10/23 and 10/24 should be support. In fact, the previous day's value area should also be support. In addition, we shouldn't see a deep penetration into the single prints of 10/23, otherwise the uptrend would be in trouble. On 10/25, the ES traded down to the high volume node between 1382-1381.50 and bounced off it, closing near its high.

 

ES Analysis for 10/26

The ES closed at 1389.25. Besides the day's high, there is no resistance above it. If the uptrend is to continue, then the high volume nodes at 1384.75-1384.25 and at 1382-1381.50 should be support. This area also includes the buying tail of 10/25. Again, if the uptrend is to continue, we should not see the ES trade far into the single prints of 10/23. I will have a long bias going into tomorrow's trading session. I will monitor internals near yesterday's high for trend continuation. However, if the ES starts to trade down, I will look to enter a long trade near the high volume nodes mentioned above after monitoring market internals. As always, prior to the trading session, I will check the Globex action.

 

Anybody else want to share their trade plan for tomorrow?

[Soultrader 12]

Hey ant... sorry about that. I just fixed it. Could you remove and upload the attachment again? Thanks

[ant 10]

Thanks Soultrader. It's fine now.

[ant 10]

The MP reference areas worked well today. The ES traded down towards the high volume node (POC) of the previous day and formed a volume and Tick divergence near the POC. Basically, the POC provided support in an uptrend. Pretty typical... See charts below. Towards the end of the trading day, a volume divergence formed near the highs.

 

Did anybody feel like the ES was going to trade through the volume area? That's why I think it helps to have a trade plan prior to the start of the trading day. Identify key reference areas to monitor that may offer good trade opportunities. For me, everything else is noise.

[Soultrader 12]

Very nice Ant. I have been relying on tape heavily lately. Its interesting to compare the tape on the YM and ES. How different they are!

 

I really enjoy your analysis ant. You have a good eye for key price levels.