Jul 312012
 

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.

Note: Tomorrow is an FOMC day, so use caution about the market reacting before and after the 2:15 PM (Eastern) release.

For the Emini S&P (ES) Futures:

Overall Outlook:

Today's distribution is P shaped that is overlapping and of similar width to yesterday.  This formation is typically associated with retracement. However, we did close below value, which is bearish and may suggest the move is not over.

Bull Scenarios:

If we open above 1381.50 look to buy at 1381.50 or 1380.50 areas.

If we open above 1383.00 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 1376.25 look to sell at 1376.25 or 1380.50 areas.

If we open below 1371.00, 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, 1376.25 and 1381.50, 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 1331.25, 1359, 1395.50, 1354.50 and 1407.75 levels.  Watch for potential reversals at these areas.

 

For the Emini Russell (TF) Futures:

Today's distribution is somewhat  trimodal and shapeless.  We are wider a bit and lower. This is bearish.

Bull Scenarios:

If we open above 790.40 look to buy at 790.40 or 783.20 areas.

If we open above 794.30, 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 782.30 look to sell at 782.30 or 783.20  areas.

If we open below 782.30, 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, 782.30 and 790.40, 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 767.20 and 800.40 areas.  Watch for reversals in these regions.

 

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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+ 5 = fourteen

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