Oct 242012
 

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The Value Area Report is a daily trading plan based on Auction Market Theory, Market and Volume Profiling techniques for the S&P and Russell Emini Futures (the values in these reports can easily be adapted for SPY [*10] and SPX markets [small premium adjustment]).   Even if you do not use this type of analysis, you should know about it, because large numbers of very well capitalized traders use this approach. As a result, it is likely in your best interest to know and understand it. I have written about these techniques here: http://markettradersjournal.com/volume-profile-analysis/ and elsewhere in this blog.  I also advise reading the notes for both markets as they are related markets. Differences between them can provide clues to what is really going on (though I do not cover cross market analysis in this report). The report is for use on the date posted above based on profile numbers from the trading day before.  I use the NinjaTrader platform with a set of tools called Nindicators to do this analysis.  In particular, the Nindicator Value Profile tool.

 

For the Emini S&P (ES) Futures:

Overall Outlook:

Because we traded inside yesterday's range, I am going to say we have a D shape again today. The FOMC meeting was responded to in a lackluster way.  When we get 2 D days in a row, it is a strong breakout mode. This is even more true when the second one is inside the first one.  We are now below  the composite high volume node at 1435 which is the balance point.  Above this I see us as bullish, below it bearish.  There is another node in the 1398 area. Support is likely at this level  if we test it.  If we see buying out of the gate tomorrow, this will be fairly bullish.  But I would be happier to see a test of 1398 first. We have reports tomorrow.  Be sure to tune in for the Emini Market Open Report on YouTube  where I try to give you a bigger (and more up to the moment) picture look at the market and associated trade plan.

Bull Scenarios:

If we open above 1412.50 look to buy at 1412.50 or 1409.75 areas.

If we open above 1414.75 then this is even more bullish and may cause a runner to the upside started by stops being hit.

Bear Scenarios:

If we open below 1406.00 look to sell at 1406.00 or 1409.75 areas.

If we open below 1401.75, then this is even more bearish and may cause a runner to the downside started by stops being hit.

Neutral Start Scenario:

If we open between, 1406.00 and 1412.50, then ranging is more likely.

Always be cautious of the impact of reports that come after the open of the day.

Special Observations:

Notes:  There is a virgin point of control at the 1398, 1425.25, 1351.75 and 1462 areas.  Watch for potential reversals in these areas.   We are bullish above 1435 and bearish below it.

 

For the Emini Russell (TF) Futures:

Because we traded inside yesterday's range, I am going to say we have a D shape again today. The FOMC meeting was responded to in a lackluster way.  When we get 2 D days in a row, it is a strong breakout mode. This is even more true when the second one is inside the first one.  We are now below  the composite high volume node at 816 which is the balance point.  Above this I see us as bullish, below it bearish.  If we see buying out of the gate tomorrow, this will be fairly bullish.  But I would be happier to see a test of 1398 in the ES market first. We have reports tomorrow.  Be sure to tune in for the Emini Market Open Report on YouTube  where I try to give you a bigger (and more up to the moment) picture look at the market and associated trade plan.

Bull Scenarios:

If we open above 812.80 look to buy at 812.80 or 811.80 areas.

If we open above 818.10, then this is even more bullish and may cause a runner to the upside started by stops being hit.

Bear Scenarios:

If we open below 810.20 look to sell at 810.20 or 811.80  areas.

If we open below 808.60, then this is even more bearish and may cause a runner to the downside started by stops being hit.

Neutral Start Scenario:

If we open between, 810.20 and 812.80, then ranging is more likely.

Always be cautious of the impact of reports that come after the open of the day.

Special Observations:

Notes:  There is a virgin point of control at the 831.40, 836.10, 846.90, 853.00 and 861.20  areas.  Watch for reversals in these regions.  We are most bullish above 817 and bearish below it.

 

Remember to check the Open Report on the Nindicator YouTube Channel just before the open of the day (you should subscribe so you are notified):  http://www.youtube.com/user/Nindicators?feature=mhee

Compare this report and the Open Report with your own analysis.

Note: These reports may vary a bit from Nindicator reports as they may under various circumstances use slightly different calculations.

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