May 302012
 

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 closed below value and near the low of the day.  This is bearish. The value area was gapped lower from  the previous day) and is narrower. We have somewhat of a D shape. This indicates a breakout mode. Therefore, a lower open tomorrow will be quite bearish.

Bull Scenarios:

If we open above 1316.50 look to buy at 1316.50 or 1314.00 areas.

If we open above 1320.50 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 1312.50 look to sell at 1312.50 or 1314.00 areas.

If we open below 1308.00, 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, 1312.50 and 1316.50, 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 1300 and 1357.50 areas. Watch for potential reversals at these areas.  1337.50 is also a magnet price area in the composite HVN. Above the 1337.50 area volume drops off at a high rate with a LVN at 1343.25. Keep an eye on these areas.

For the Emini Russell (TF) Futures:

Today we closed below value and near the low of the day.  This is bearish. The value area was gapped lower from  the previous day) and is narrower. We have somewhat of a D shape. This indicates a breakout mode. Therefore, a lower open tomorrow will be quite bearish.

Bull Scenarios:

If we open above 766.00 look to buy at 766.00 or 763.80 areas.

If we open above 769.50, 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 761.90 look to sell at 761.90 or 763.80  areas.

If we open below 759.20, 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, 761.90 and 766.00, 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 778 and 788.70 and 750 (below) areas.  We are currently in a HVN on the composite at 780. Volume drops off above this area to a low volume node at 784.30

 

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

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