Oct 312012
 

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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:

Again we consolidated inside previous days but in a fairly healthy 15 point range (or so).  The market tested lower off the open then rallied higher but in the final hour traded lower to close below value. This is bearish.  The profile shape is somewhat elongated to D shaped. The breakout mode therefore continues. The market closure in recent days confuses things and the market is perhaps sorting it out.   A downside failure of cycling below 1395-1397 could be fairly ugly.  I do still consider us bullish above 1397.  We have reports tomorrow AM.  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 1409.00 look to buy at 1409.00 or 1406.00 areas.

If we open above 1414.50 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 1402.25 look to sell at 1402.25 or 1406.00 areas.

If we open below 1400.50, 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, 1402.25 and 1409.00, 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 1387.50 1425.25, 1351.75 and 1462 areas.  Watch for potential reversals in these areas.   We are bullish above 1397 and bearish below it.

 

For the Emini Russell (TF) Futures:

Again we consolidated inside previous days but in a fairly narrow range.  The market tested lower off the open then rallied higher but in the final hour traded lower to close in the upper value area. This is bullish.  The profile shape is somewhat D shaped. The (mega) breakout mode therefore continues. The market closure in recent days confuses things and the market is perhaps sorting it out.   A downside failure of cycling below 803 could be fairly ugly.  I do still consider us bullish above 817.  We have reports tomorrow AM.  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 813.50 look to buy at 813.50 or 809.70 areas.

If we open above 816.20, 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 808.90 look to sell at 808.90 or 809.70  areas.

If we open below 808.30, 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, 808.90 and 813.50, 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 831.40, 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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