Aug 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:

We again got the breakout we expected today. We have again formed another D shape that is larger.  It is interesting that the ES forms a D each day while gaping abruptly. So, we remain in breakout mode.  The value area is gaped higher and is wider. This is bullish. We are not too far from the center of a multi-day value area centered on 1408.  With VAH and VAL at 1412 and 1403 respectively.  It is a long weekend, so Tuesday's open will tell. There is a session Monday AM that we will ignore for analysis purposes.

Bull Scenarios:

If we open above 1408.75 look to buy at 1408.75 or 1406.50 areas.

If we open above 1411.75 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 1402.50 look to sell at 1402.50 or 1406.50 areas.

If we open below 1397.00, 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, 1402.50 and 1408.75, 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 P  shaped.  This suggests retracement.   The value area is overlapping higher and is wider.  This is bullish with suggestions of consolidation. It is a long weekend however, so Tuesday's open will tell. There is a session Monday AM that we will ignore for analysis purposes.

Bull Scenarios:

If we open above 813.20 look to buy at 813.20 or 812.00 areas.

If we open above 815.00, 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 808.30 look to sell at 808.30 or 812.00  areas.

If we open below 802.90, 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, 808.30 and 813.20, 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, 815.90, 821.40, 827.20, and 835.30 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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