May 242012
 

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.

For the Emini S&P (ES) Futures:

Overall Outlook:

Today we again closed above value.  This is bullish. The value area is gapped higher and is a bit narrower.  The profile has a D shape for the first time all week. This suggests an establishment of value and a late day breakout form that value.  The market opened higher today and found support at yesterday's VAH. This makes it a pretty normal day (for a change).  We did manage to range in the 1300 to 1325 zone as expected and are still in that range. Use caution however as the bears have not likely gone away and we are at multi day highs.

Bull Scenarios:

If we open above 1322.00 look to buy at 1322.00 or 1317.50 areas.

If we open above 1323.50 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 1313.50 look to sell at 1313.50 or 1317.50 areas.

If we open below 1308.25, 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, 1313.50 and 1322.00, 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 1300, 1325 and 1332 areas. Watch for potential reversals at these areas.  1305 is also a magnet price area as the composite HVN. The Composite also suggests we are in a range between 1274 and 1327.

 

For the Emini Russell (TF) Futures:

Today we again closed above value.  This is bullish. The value area is gapped higher and is a bit narrower.  The profile has a D shape for the first time all week. This suggests an establishment of value and a late day breakout form that value.  The market opened higher today and found support at yesterday's VAH. This makes it a pretty normal day (for a change).  Use caution however as the bears have not likely gone away and we are at multi day highs.

Bull Scenarios:

If we open above 763.60 look to buy at 763.60 or 761.60 areas.

If we open above 768.80, 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 756.20 look to sell at 756.20 or 761.60  areas.

If we open below 754.50, 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, 756.20 and 763.60, 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 778 and 749.60 areas.  We are currently in a LVN on the composite that is bounded by 759 below and 787 above.  Prices should be fairly free to roam in this range.

 

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

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