Aug 282012
 

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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's distribution was somewhat D shaped with the POC in the upper part of the range. Selling off in the afternoon and closing near the VAL has the market mixed. There are reports tomorrow that may very well take us from this congestion / breakout mode.  Use caution in the absence of conviction.

Bull Scenarios:

If we open above 1410.75 look to buy at 1410.75 or 1410.50 areas.

If we open above 1412.00 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 1407.25 look to sell at 1407.25 or 1410.50 areas.

If we open below 1403.25, 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, 1407.25 and 1410.75, 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 and 1422.50 levels.  Watch for potential reversals at these areas.   We are bullish above 1397 and bearish below it.  We are at the top of the multi year range in this market and have rallied on fairly low volume.

 

For the Emini Russell (TF) Futures:

Today's distribution was somewhat D shaped with the POC in the upper part of the range. Rallying in the afternoon and closing near the VAH has the market biased upward. There are reports tomorrow that may very well take us from this congestion / breakout mode.  Use caution in the absence of conviction.

Bull Scenarios:

If we open above 813.90 look to buy at 813.90 or 813.00 areas.

If we open above 814.80, 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 810.60 look to sell at 810.60 or 813.00  areas.

If we open below 807.10, 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, 810.60 and 813.90, 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 764.60, 827.20, 821.4, 811.20 and 853.30 areas.  Watch for reversals in these regions.  We are most bullish above 793.00 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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