Oct 262012
 

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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:

Today (Friday) we formed another consolidation inside the range of the last several days.  So, we have a D shape again today; 4th day in a row.  We also tagged the 1398 level I have spoken about at the session low and rallied higher.  This may very likely be bullish.  Either way, I suspect we are breaking out  from here.   It may be a bit pre-mature, but I now see us as somewhat bullish above 1398.  Above this I see us as bullish, below it bearish.  If we break lower, following an inability to push higher, it may be a significant breakout.   However, it is the weekend, so it will be good to re-evaluate Monday.  We also have reports Monday AM and a pending election.  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 1411.00 look to buy at 1411.00 or 1407.00 areas.

If we open above 1412.50 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 1404.00 look to sell at 1404.00 or 1407.00 areas.

If we open below 1397.50, 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, 1404.00 and 1411.00, 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 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:

Today (Friday) inside the range of the last several days.  So, we have somewhat of a D shape again today; 4th day in a row.   I suspect we are breaking out  from here.   816 is a key node on the composite profile.  Above this I see us as bullish, below it bearish.  If we break lower, following an inability to push higher, it may be a significant breakout.   However, it is the weekend, so it will be good to re-evaluate Monday.  We also have reports Monday AM and a pending election.  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 814.10 look to buy at 814.10 or 810.50 areas.

If we open above 818.60, 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 807.50 look to sell at 807.50 or 810.50  areas.

If we open below 804.00, 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, 807.50 and 814.10, 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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